Phuket Beach Hotel has an opportunity to lease its under-utilised space to a karaoke pub and earn a rental income. Alternatively, the hotel could develop the unused space and create its own pub. The general manager of the hotel must decide which of the two capital projects to recommend to the hotel owners. The case presents sufficient information to build cashflow forecasts for each project and to rank the mutually exclusive projects using various evaluation criteria.
PHUKET BEACH HOTEL: 互斥项目评估
Capital Budgeting, Incremental Analysis, the Treatment of Sunk Costs