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BITM1313 Finance: DE5, DE6, DE7 and DE8 201502 Semester

Group Assignment (20%) [Hospitality Venture Project Valuation]

Read the following case and follow the requirements and instructions. Case You are the new business development team of the consulting company. The consulting businesses include hotels, resorts, sports, cinema, and shopping malls (but, don’t select a restaurant related topic, this year!!!) Your client corporation is actively seeking for new opportunities to expand the business of the group. The client corporation is giving your team an assignment to explore and identify a new business venture with the following terms of reference: 1. The new business venture should be related to tourism and hospitality to create exceeding profits and synergy if there is the existing lines of business. The venture does not have a preset limit on the investment amount. You need to prepare a business plan that will be submitted to the Board of Directors of your client corporation to seek their approval. You need to justify your plan if you need to get the fund. The business plan must consist of a financial analysis with a minimum period of 5 years. The financial director has indicated that a discount rate of 12% should be used in the analysis. The group required an IRR of 15% for all projects to get approval. The financial analysis should include at least NPV, IRR and payback methods. State clearly all the assumptions made in the business plan. E.g. all estimations on relevant revenues and costs. You should also include a description of any benefit that cannot be quantified easily.

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Instructions on the assignment: 1. Each group should comprise of a maximum of 5 and a minimum of 3 team members. 2. Submit the intermediate works of the assignment and final business plan on or before the following target date: a. 23 Mar (DE5 & DE6) / 26 Mar (DE7 & DE8) – A brief presentation describing your business venture. This is for a review on whether...