Business case no. 2 • • • On December 10, 2020, the Board of DEF Hotel & Leisure Inc., invited you to attend their Board Meeting and there you were informed of the following pressing concerns of the Company relative to its projects: The completion of the projects would again be delayed by another two years due to various community quarantines imposed by IATF during the COVID-19 pandemic. The projects are projected to be completed by December 2022 and operational by the last quarter of 2023. • The Company needs at least P30 Million working capital to fund the initial operation of the Hotel. The Company would not be able to service the loan amortizations for the approved term loans. Questions: a. As the handling Account Manager of DEF Hotel & Leisure Inc., what would you recommend to address its concerns? b. What are the opportunity costs or lost incurred by DEF Hotel & Leisure Inc in the given scenarios? c. What are the lessons that we can draw from the given case?
Business case no. 2 • • • On December 10, 2020, the Board of DEF Hotel & Leisure Inc., invited you to attend their Board Meeting and there you were informed of the following pressing concerns of the Company relative to its projects: The completion of the projects would again be delayed by another two years due to various community quarantines imposed by IATF during the COVID-19 pandemic. The projects are projected to be completed by December 2022 and operational by the last quarter of 2023. • The Company needs at least P30 Million working capital to fund the initial operation of the Hotel. The Company would not be able to service the loan amortizations for the approved term loans. Questions: a. As the handling Account Manager of DEF Hotel & Leisure Inc., what would you recommend to address its concerns? b. What are the opportunity costs or lost incurred by DEF Hotel & Leisure Inc in the given scenarios? c. What are the lessons that we can draw from the given case?
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.6P
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