OPERATIONS MANAGEMENT

in HOSPITALITY AND TOURISM MANAGEMENT

Final Examination
First Semester, AY 2023-2024

You are requested by a friend to advise him as to the best possible allocation
that would make use of the INVESTMENT for his proposed business idea for a
AESTHETICS AND MASSAGE THERAPY CLINIC.

The following are to be considered:

1. Investment in Cash is already P10M
2. Bank Loan is P5M, payable in 5 years
3. Interest on Bank Loan is 8% per year
4. The land that your friend is thinking of buying measures 350 sq m, which costs
P3,000 per sq m.
5. Your friend hopes to construct a two-storey building which is to be 250 sq m in
total. Construction cost is P50,000 per sq m.
6. Equipment cost is P4M.
7. Furniture and Fixtures are at a total price of P200,000.
8. Clinic set-up/ interior design cost has been placed at P400,000.
9. Purchases for consumables for the first month total P86,000.
10. Salaries to be allocated for the first month, and monthly thereafter for the staff
is P68,000.

For the estimated SALES and PROJECTED INCOME, the following need to be
considered:
1. Sales per month: P460,000
2. Other Revenues annually: P16,400
3. Annual taxes: P30% of the Income Before Income Taxes
4. Monthly Utilities Expense: P16,000
5. Annual Advertising cost: P6,000
6. Annual Maintenance Expense: P20,000

INSTRUCTIONS:
1. List down the items on how the PhP15M investment would be spent on.

2. Prepare a list of Fixed Assets and the corresponding cost, with the GRAND
total.

3. Prepare the Income Statement

(Company Name: XXXX Limited; For the Year Ended December 31,
20XX)

4. Compute the ROI

Good luck!