05.07 F5 Mid-term project_question Compatibility Mode] - Word Yasmeen Sanchez X File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Share A Times New Ror - 12 A A A A BIUXX A aly A. AaBbCD AaBbCcI AaBbCD AaBbCD AaBb CD 1 Normal 1 Body Text 1 List Para... 1 No Spac... 1 Table Par... Paste Find - ab Replace Select- Editing Create and Share Request Adobe PDF Signatures Adobe Acrobat Font Styles Clipboard L Paragraph TV1!!!!!..2...1.1.3.1.1.4 5. 6 Benefit of Sustainability: Cost saving approach Marriott's environmental commitments are aiming to further reduce energy and water consumption by 20%. To meet the goals, Marriott Marquis initiated a long-term project to reduce waste by 20%. (We here refer that maximum conversion rate, max. is 20%) Considerations for cost analysis 1. Annual cost of waste for Marriott Marquis (per hotel): The following table is to illustrate Marriott Marquis's average monthly weights for recycling, trash, compost for recent years. All weights are marked in tons. Recycling and trash amounts are measured in 35-yard compactors. It costs $150 to haul a 35-yard compactor plus $59 per tonnage. Compost amount is measured based on a 35-gal container. 22.5 containers are required for tonnage It costs $6.66 per a recycled container with delivery costs of $59 per tonnage. The 35-yard compactor can be shared for recycling and trash. (Assume that recycling and trash & compost treatment process is implemented once a month.) Table: Marriott Marquis weights for recycle, trash, and compost Page 1 of 4 100% 891 words Accessibility: Unavailable Type here to search O g w CO 6:34 PM 10/12/2020 E 05.07 Mid-term project question Compatibility Mode] - Word Yasmeen Sanchez X File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Share E 21 AaBbCD AaBbCel AaBbcc AaBbCD AaBbceD Times New Ror - 12 A A A A B 1 0 MU X, x I aby-A Find - ac Replace Select- Paste 1 Normal 1 Body Text 11 List Para... 1 No Spac... 1 Table Par... Create and Share Request Adobe PDF Signatures Adobe Acrobat Font Editing Clipboard L Paragraph Styles TITILL 21.3.4.5.6. Table: Marriott Marquis' weights for recycle, trash, and compost Month Recycle Trash Compost Total July 95.52 95.52 August 86.5 86.5 Sept 2.89 84.93 87.82 Oct 9.33 110.57 119.9 Nov 17.47 74.41 91.88 Dec 5.38 59.93 65.31 Jan 17.82 70.69 88.51 Feb 9.85 85.21 95.06 March 19.83 96.82 6.35 123 April 11.89 87.33 19.31 118.53 May 26.11 91.61 6.85 124.57 Junc 17.53 85.93 16.05 119.51 Total 138.1 1029.45 48.56 1216.11 -- 100% Page 1 of 4 891 words Accessibility: Unavailable H Type here to search O g CO 6:34 PM 10/12/2020 E 50 F 57 - Mid-term project_question Compatibility Mode] - Word Table Tools Yasmeen Sanchez File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Design Layout Tell me what you want to do Share 21 Times New Ror - 12 A A Aa A E. B 1 0 MU X, x VN aty A. AaBDCD AaBbCel AaBbCD AaBbCD AaBLCD 1 Normal 1 Body Text 1 List Para... 1 No Spac... 1 Table Par... Find - ac Replace Select Paste Create and Share Request Adobe PDF Signatures Adobe Acrobat Font Paragraph Clipboard L Styles 4 ... 5....6 Editing 17. 1... .. 2 1 2. Expected Cash Flows: Let's denote total annual cost savings (recycling, trash and compost) for Marriott Marquis as Com discount rate as r , and maximum conversion rate is Ymx (Gamma Max). Suppose annual conversion rate, y (Gamma), is increasing linearly each year over 10 years. That is, y = 0.1ymar in the first year, 0.2Ymer in the second year... Ymax in the last (10) year. . The expected cash flow (CF) is C: X Ymer X 0.1) in the first year, Cs X max X 0.2) in the second year, ..., CsX (max X 1) in the last (10) year. 3. Discount rate: According to the effective yield of the Bank of America Merrill Lynch US Corporate 7-10 Year Index that compiles all securities with a remaining term to maturity of greater than or equal to 7 years and less than 10 years, 10-year corporate bond yield is 3.85% 4. Typical project length: Many of Marriott's hotels have a form of committees or independent CSR work groups. Each work group has launched and is currently working on relevant projects as part of enhancing business sustainability with typical project lasting about 10 years. 100% Page 2 of 4 891 words Accessibility: Unavailable Type here to search O g CO 6:34 PM 10/12/2020 E 05.07 F5 Mid-term project_question Compatibility Mode] - Word Table Tools Yasmeen Sanchez File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Design Layout Tell me what you want to do Share E 21 Times New Ror - 12 A A A A B 1 0 MU X, x VN aty A AaBbCD AaBbce AaBbCD AaBbCD AaBb CD 1 Normal 1 Body Text 1 List Para... 1 No Spac... 1 Table Par... Paste Find - a Replace Select Editing . Create and Share Request Adobe PDF Signatures Adobe Acrobat Font N Clipboard L 4 5 6 S. Paragraph Styles 1:21:31 Nel Present Value (NPV) and Internal Rale of Return (IRR): NPV determine the sum of the present values of cash inflow and outflows over the period of project. NPV calculate an estimate of the profitability of a project or investment. The formula can be written as i. NPV = +919+...+-C + 1+r (1+0) ii. IRR finds r such as - C + t-1(1+r) where - Co is initial cost investment), C is cash flow, r is discount rate, and I is time. D (1+r) "-1 (1+ (+) 0 The NPV method is a direct measure of the dollar contribution to the investors, while the IRR method provides the return on the original money invested. NPV and IRR method can give a conflicting ranking of projects when IRR method is compared to NPV 2 100% Page 2 of 4 891 words Accessibility: Unavailable Type here to search O CO 6:34 PM 10/12/2020 E 50 F 57 - Mid-term project question Compatibility Mode] - Word Yasmeen Sanchez File Share Paste Create and Share Request Adobe PDF Signatures Adobe Acrobat Clipboard Font 5. 6. Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Find - Times New Ror - 12 A A A A A AaBbCD AaBbCel AaBbCD AaBbCD AaBbCD ac Replace BIU X, X Aaby aby A 1 Normal 1 Body Text 11 List Para... 1 No Spac... 1 Table Par... Select Paragraph Styles Editing LITTIILI 2:13 for mutually exclusive projects. Also multiple IRR problem can be an issue when cash flows during the project lifetime are negative. Question for Project Your boss now asked you to prepare for a report for board meeting in a week. Your report will be distributed to board members whose average age is slightly over 60 years old. Thus, you need to consider the efficiency and visibility when you write your report!. Your report is expected to include answers for the following questions that the board members want to know: Report Q1-1) What is the annual cost of waste for Marriott Marquis in recent years? Q1-2) Suppose there is no initial investment (cost), lo - 0 (without any running cost). What is the maximum allowed annual investment, I., for this project to have positive NPV? Q1-3) Suppose there is initial investment (cost), 10, of $35,000 required. What is the maximum allowed annual investment, lv, for this project to have positive NPV? Q2) Provide the financial analysis for answers that you have derived in Question 1. Q3) Provide your final opinion (s 1 paragraph length) as a project manager 100% Page 3 of 4 891 words Accessibility: Unavailable I Type here to search O w CO 6:35 PM 10/12/2020 F 05.07 Mid-term project question Compatibility Mode] - Word Yasmeen Sanchez File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Share A Times New Ror - 12 A A Aa A E. BIbe X, X Aalty A- AaBbCD AaBbCel AaBbcc AaBbCD AaBbceD 1 Normal 1 Body Text 11 List Para... 1 No Spac... 1 Table Par... Paste Find - ac Replace Select Editing Create and Share Request Adobe PDF Signatures Adobe Acrobat Clipboard Font Paragraph Styles :::::::::::::::::::::::: 15. 1 6 Criteria for Evaluation: 1) 2) Accuracy Are the numbers that you have provided to your boss is correct? (You should not lie when you report to your boss. You will be asked to provide 3 numbers that the board members want to know (Q1-1, Q1-2, and Q1-3). Up to 10% differences on your estimation will be allowed to get the full credit. Logic a. Do you use a reasonable financial analysis method in a right way? b. Do you use a valid discount rate? c. Do you use reasonably estimated the cash flows? Communication a. Report: Are you an efficient communicator? Is it persuasive? b. Final opinion paragraph: Based on your analysis, do you make a reasonable decision? c. Report Format 3) 3 100% Page 3 of 4 891 words Accessibility: Unavailable H Type here to search O g CO 6:35 PM 10/12/2020 F 05.07 F5 Mid-term project_question Compatibility Mode] - Word Yasmeen Sanchez X File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Share A Times New Ror - 12 A A A A BIUXX A aly A. AaBbCD AaBbCcI AaBbCD AaBbCD AaBb CD 1 Normal 1 Body Text 1 List Para... 1 No Spac... 1 Table Par... Paste Find - ab Replace Select- Editing Create and Share Request Adobe PDF Signatures Adobe Acrobat Font Styles Clipboard L Paragraph TV1!!!!!..2...1.1.3.1.1.4 5. 6 Benefit of Sustainability: Cost saving approach Marriott's environmental commitments are aiming to further reduce energy and water consumption by 20%. To meet the goals, Marriott Marquis initiated a long-term project to reduce waste by 20%. (We here refer that maximum conversion rate, max. is 20%) Considerations for cost analysis 1. Annual cost of waste for Marriott Marquis (per hotel): The following table is to illustrate Marriott Marquis's average monthly weights for recycling, trash, compost for recent years. All weights are marked in tons. Recycling and trash amounts are measured in 35-yard compactors. It costs $150 to haul a 35-yard compactor plus $59 per tonnage. Compost amount is measured based on a 35-gal container. 22.5 containers are required for tonnage It costs $6.66 per a recycled container with delivery costs of $59 per tonnage. The 35-yard compactor can be shared for recycling and trash. (Assume that recycling and trash & compost treatment process is implemented once a month.) Table: Marriott Marquis weights for recycle, trash, and compost Page 1 of 4 100% 891 words Accessibility: Unavailable Type here to search O g w CO 6:34 PM 10/12/2020 E 05.07 Mid-term project question Compatibility Mode] - Word Yasmeen Sanchez X File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Share E 21 AaBbCD AaBbCel AaBbcc AaBbCD AaBbceD Times New Ror - 12 A A A A B 1 0 MU X, x I aby-A Find - ac Replace Select- Paste 1 Normal 1 Body Text 11 List Para... 1 No Spac... 1 Table Par... Create and Share Request Adobe PDF Signatures Adobe Acrobat Font Editing Clipboard L Paragraph Styles TITILL 21.3.4.5.6. Table: Marriott Marquis' weights for recycle, trash, and compost Month Recycle Trash Compost Total July 95.52 95.52 August 86.5 86.5 Sept 2.89 84.93 87.82 Oct 9.33 110.57 119.9 Nov 17.47 74.41 91.88 Dec 5.38 59.93 65.31 Jan 17.82 70.69 88.51 Feb 9.85 85.21 95.06 March 19.83 96.82 6.35 123 April 11.89 87.33 19.31 118.53 May 26.11 91.61 6.85 124.57 Junc 17.53 85.93 16.05 119.51 Total 138.1 1029.45 48.56 1216.11 -- 100% Page 1 of 4 891 words Accessibility: Unavailable H Type here to search O g CO 6:34 PM 10/12/2020 E 50 F 57 - Mid-term project_question Compatibility Mode] - Word Table Tools Yasmeen Sanchez File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Design Layout Tell me what you want to do Share 21 Times New Ror - 12 A A Aa A E. B 1 0 MU X, x VN aty A. AaBDCD AaBbCel AaBbCD AaBbCD AaBLCD 1 Normal 1 Body Text 1 List Para... 1 No Spac... 1 Table Par... Find - ac Replace Select Paste Create and Share Request Adobe PDF Signatures Adobe Acrobat Font Paragraph Clipboard L Styles 4 ... 5....6 Editing 17. 1... .. 2 1 2. Expected Cash Flows: Let's denote total annual cost savings (recycling, trash and compost) for Marriott Marquis as Com discount rate as r , and maximum conversion rate is Ymx (Gamma Max). Suppose annual conversion rate, y (Gamma), is increasing linearly each year over 10 years. That is, y = 0.1ymar in the first year, 0.2Ymer in the second year... Ymax in the last (10) year. . The expected cash flow (CF) is C: X Ymer X 0.1) in the first year, Cs X max X 0.2) in the second year, ..., CsX (max X 1) in the last (10) year. 3. Discount rate: According to the effective yield of the Bank of America Merrill Lynch US Corporate 7-10 Year Index that compiles all securities with a remaining term to maturity of greater than or equal to 7 years and less than 10 years, 10-year corporate bond yield is 3.85% 4. Typical project length: Many of Marriott's hotels have a form of committees or independent CSR work groups. Each work group has launched and is currently working on relevant projects as part of enhancing business sustainability with typical project lasting about 10 years. 100% Page 2 of 4 891 words Accessibility: Unavailable Type here to search O g CO 6:34 PM 10/12/2020 E 05.07 F5 Mid-term project_question Compatibility Mode] - Word Table Tools Yasmeen Sanchez File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Design Layout Tell me what you want to do Share E 21 Times New Ror - 12 A A A A B 1 0 MU X, x VN aty A AaBbCD AaBbce AaBbCD AaBbCD AaBb CD 1 Normal 1 Body Text 1 List Para... 1 No Spac... 1 Table Par... Paste Find - a Replace Select Editing . Create and Share Request Adobe PDF Signatures Adobe Acrobat Font N Clipboard L 4 5 6 S. Paragraph Styles 1:21:31 Nel Present Value (NPV) and Internal Rale of Return (IRR): NPV determine the sum of the present values of cash inflow and outflows over the period of project. NPV calculate an estimate of the profitability of a project or investment. The formula can be written as i. NPV = +919+...+-C + 1+r (1+0) ii. IRR finds r such as - C + t-1(1+r) where - Co is initial cost investment), C is cash flow, r is discount rate, and I is time. D (1+r) "-1 (1+ (+) 0 The NPV method is a direct measure of the dollar contribution to the investors, while the IRR method provides the return on the original money invested. NPV and IRR method can give a conflicting ranking of projects when IRR method is compared to NPV 2 100% Page 2 of 4 891 words Accessibility: Unavailable Type here to search O CO 6:34 PM 10/12/2020 E 50 F 57 - Mid-term project question Compatibility Mode] - Word Yasmeen Sanchez File Share Paste Create and Share Request Adobe PDF Signatures Adobe Acrobat Clipboard Font 5. 6. Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Find - Times New Ror - 12 A A A A A AaBbCD AaBbCel AaBbCD AaBbCD AaBbCD ac Replace BIU X, X Aaby aby A 1 Normal 1 Body Text 11 List Para... 1 No Spac... 1 Table Par... Select Paragraph Styles Editing LITTIILI 2:13 for mutually exclusive projects. Also multiple IRR problem can be an issue when cash flows during the project lifetime are negative. Question for Project Your boss now asked you to prepare for a report for board meeting in a week. Your report will be distributed to board members whose average age is slightly over 60 years old. Thus, you need to consider the efficiency and visibility when you write your report!. Your report is expected to include answers for the following questions that the board members want to know: Report Q1-1) What is the annual cost of waste for Marriott Marquis in recent years? Q1-2) Suppose there is no initial investment (cost), lo - 0 (without any running cost). What is the maximum allowed annual investment, I., for this project to have positive NPV? Q1-3) Suppose there is initial investment (cost), 10, of $35,000 required. What is the maximum allowed annual investment, lv, for this project to have positive NPV? Q2) Provide the financial analysis for answers that you have derived in Question 1. Q3) Provide your final opinion (s 1 paragraph length) as a project manager 100% Page 3 of 4 891 words Accessibility: Unavailable I Type here to search O w CO 6:35 PM 10/12/2020 F 05.07 Mid-term project question Compatibility Mode] - Word Yasmeen Sanchez File Home Insert Design Layout References Mailings Review View Help Draw Acrobat Tell me what you want to do Share A Times New Ror - 12 A A Aa A E. BIbe X, X Aalty A- AaBbCD AaBbCel AaBbcc AaBbCD AaBbceD 1 Normal 1 Body Text 11 List Para... 1 No Spac... 1 Table Par... Paste Find - ac Replace Select Editing Create and Share Request Adobe PDF Signatures Adobe Acrobat Clipboard Font Paragraph Styles :::::::::::::::::::::::: 15. 1 6 Criteria for Evaluation: 1) 2) Accuracy Are the numbers that you have provided to your boss is correct? (You should not lie when you report to your boss. You will be asked to provide 3 numbers that the board members want to know (Q1-1, Q1-2, and Q1-3). Up to 10% differences on your estimation will be allowed to get the full credit. Logic a. Do you use a reasonable financial analysis method in a right way? b. Do you use a valid discount rate? c. Do you use reasonably estimated the cash flows? Communication a. Report: Are you an efficient communicator? Is it persuasive? b. Final opinion paragraph: Based on your analysis, do you make a reasonable decision? c. Report Format 3) 3 100% Page 3 of 4 891 words Accessibility: Unavailable H Type here to search O g CO 6:35 PM 10/12/2020 F