The Study Of The Investment Benefits For Changbaishan Hotel New Building Project

In this article, I carry on the comprehensive analysis to the investment benefits for the new building project of Changbaishan Mountain Hotel, which involves the aspects of item construction necessity, market analysis, construction scale, construction plan, investment estimation, and so on. I use the method of technical economy to complete the research in the financial appraisal and benefit analysis. The Changbaishan hotel is a Four-Star tourist hotel and started in 1982 .It has the floor space of 28000 square meters and the main high building has 15 floors (14 floors above the ground, one floor underground ) with the height of 55 meters. The management items are mainly taken in guest rooms, dining, bathing and the entertainment. It has 271guest rooms and possesses the fixed asset of 180000000 Yuan. The economic efficiency is continuously fine. But there are still something to be improved. For example, the hotel installation has been obsolete and aging which makes the hotel service item more unitary which makes the reception ability limited correspondingly. And the service function is not perfect. The hotel urgently needs to expand the class, enlarge the scale, and enhance the competitive ability of enterprise market. The goal market of the new building project is to satisfy the visitor's need of upscale dining, the healthy and happiness demand and to meet the commercial visitor's individual need, fulfill the visitors and the inhabitants'shopping demand and other banquet requirement. The market orientation lies in middle and top grade hotel and dining, and the consumers are more suitable for the business men. As a new building engineering project, the field site locates in the courtyard of Changbaishan hotel, which lies at the connection place of the Xinjiang street and the Ziyou road and belong to the commercial land. The land area planned is 9700 square meters, and the building area is 3032 square meters and the floor space 17876 square meters. The layout of the construction is above six, underground one, which includes: the shopping mall, the dining room, the KTV reserved room, the multi-functions hall, the conference room, 57 sets of commercial rooms ,underground accessorial room and so on. After the project completes, the guesthouse management scale expands one time in the original foundation and the necessary service function is perfect. The basic installation is advanced and all of these make the hotel achieve the Five-Star tourist hotel standard. The condition of the construction project is comfortable. There are many advantages, such as good geography position, the convenient traffic, beautiful scenery and the perfect foundation equipment. The design of the new building engineering is reasonable and the appearance of the building is artistic. The service function is integrate especially for the water supply, the heating, the air conditioning, power distribution each specialty necessary of which conforms to the national standard regulation. The budget of the investment item includes apartment guest room, big and small dining rooms, KTV reserved room, multi-functions hall, market construction, repair cost, furniture purchase; underground boiler room, air conditioning engine room, pump house , center water treatment room construction, equipment purchase and installment; inside and out room public project. The budget of construction investment comprises of the project expense, other construction expenses and the preparation spends. The project expense divides into three parts. They are the construction engineering cost, the equipment and the labor spends and installment cost. Among them, the architectural engineering expense is 26509100 Yuan, the equipment and the labor appliance purchase expense is 7978300 Yuan, the installment engineering cost total amount is 5260500 Yuan. The budget of other engineering construction expense is 27389800 Yuan. The basic preparation spends is estimated to be 6713800 Yuan. The cost of rising price of the preparation spends is 1326900 Yuan. Construction time interest is 1317600 Yuan. The estimate of construction investment is 76496000 Yuan. The floating capital of one year is 404200 Yuan. The total fund of construction investment and the floating capital constitution which is put in the project is 81200200 Yuan. The construction investment is 76496000 Yuan, in which the construction time interest is 1317600 Yuan. The Floating capital is 4704200 Yuan, in which the innate floating capital is 1411200 Yuan. The construction capital source comprises of the bank loan and the capital (loans 44610600 Yuan, the capital 36589600 Yuan). The capital that accounts for the proportion of 45.06% is put 11589600 Yuan by the Changbaishan hotel in 2 years and is noninstallment put 25000000 Yuan by the cooperation investment business. The construction time of the project will last 2 years. The integrative proportion of the one-yearplanned construction investment is 20%, 80%. The long-time loan is 41317600 Yuan and the loan of floating capital is 3293000 Yuan. So the total amount of the loan is 44610600 Yuan and the interest rate of the loan is 6.588%. For the new building project, the management and the calculation will be conducted independently and the financial appraisal scope is in this project. The construction time is 2 years, the management time is 18 years and the calculation time 20 years. The management load is confirmed to be 70% in the 3rd year of calculation time; the 4th year 80%; the 5th year 90% and yearly averages 100%.from the 6th year. The datum income rate of the project finance is 10%. The cost of the raw material, the fuel and the power adds up to 11120500 Yuan one year. The wages and the welfare funds are estimated to be 2972000 Yuan one year and the yearly repair expense is 116910000 Yuan. The depreciation cost of the fixed asset in management time of 1-5 year is 4069600 Yuan one year and the intangible asset and extending capital in the management time of 1-5 years is 2445600 Yuan one year. The financial expense mainly includes the interest of long-term loan and the floating capital loan. Other expenses are approximately 3580000 Yuan every year. The total cost of the 3rd year of the calculation time is 24884500 Yuan and the variable cost is approximately 11120500 Yuan every year. The fixed cost is approximately 14614300 Yuan per year and the management cost is approximately 18814100 Yuan. The annual mean sale income is 37728400 Yuan and the annual mean sale tax and the additive is 2075000 Yuan. The annual mean total cost is 22635000 Yuan and the total amount of annual mean profit is 13018400 Yuan. The annual mean income tax is 4296100 Yuan. The annual mean profit after tax is 8722300 Yuan. The income rate of interior project finance is 18.66% and the finance net benefits are 47642600 Yuan. The investment recycling time is 7.28 years. The interior income rate of capital is 17.11%.The net capital cash is 26778300 Yuan. The profit margin of the investment is 16.03%. From the result of sensitive analysis, we can see that the business income is the most sensitive factor and the construction investment and the raw material price are not so sensitive. The critical point of the business income drop, construction investment enhancement and the raw material price enhancement are approximately 19.11%, 73.5% and 67.55% respectively. The project can withstand larger risks. Moreover I use the stable fixed priceprinciple in this report, therefore this project has stronger anti-risk ability. The loss balance point of the project in the load repayment deadline (1-7 year) is 46.80%. After the repayment of load, the loss balance point is 35.78%. So the project has certain anti-risk ability. The financial analysis indicates that the interior financial income rate is 18.66% which surpasses the datum income more than 10%. The investment recycling time is 7.28 years. The debt rate of the average property is 11.59%. The loan repayment time is 6.20 years. Therefore, it's more feasible for the project in the financial benefit. Although there are still certain market risks for the project .The risks are not important and can be controlled and dodged through suitable treatment. To sum up, from the analysis above, this project is feasible. I hope it can be realized sooner through the endeavor of all relative parts.