tokyo disney and the disneysea park bray – pi – russell – tassin – wang critique
TRANSCRIPT
TOKY
O DIS
NEY
AND THE
DISNEYS
EA PARK
Bray – Pi – Russell – Tassin – Wang
CR
I TI Q
UE
• Our Results
• Critique – Question 2
• Critique – Questions 4a, 4b
• Emphasis – Question 6
• Critique – Question 7
• Comparing ResultsAG
EN
DA
Bray – Pi – Russell – Tassin – Wang
Bray – Pi – Russell – Tassin – Wang
NPV
1999 2000 2001 2002 2003 2004 Terminal ValueInitial Investment (3,400)New Project Cash Flow 44.96 47.75 147.92 210.37 245.08 4,337.77 Discount rate 5.65% 5.65% 5.65% 5.65% 5.65% 5.65%Discounted Cash flow 42.55 42.78 125.44 168.85 186.19 3,295.48 NPV 461.29
OUR RESULTS
Bray – Pi – Russell – Tassin – Wang
OUR RESULTS
1999 2000 2001 2002 2003 2004
(3,400) 44.96 47.75 147.92 210.37 4,582.85 4337.768
027
IRR 8.48%
Bray – Pi – Russell – Tassin – Wang
OUR RESULTS
AAR
2000 2001 2002 2003 2004 total
Net income -124.55 -121.75 -21.58 40.87 75.58 -151.42
Fix Asset 3,219.80 3050.3 2880.9 2711.4 2541.9 14,404.30
AAR -1.051%
Bray – Pi – Russell – Tassin – Wang
OUR RESULTS
ACFR
2000 2001 2002 2003 2004 Total
Cash flow 44.96 47.75 147.92 210.37 245.08 139.22
Fix Asset final year 2541.9
Initial investment 3,400
ACFR 78.9%
• Question 2 – NPV Calculation of Project – data is typed into cells rather than linked throughout the spreadsheet
• Resulted in miscalculation and is inefficient use of spreadsheet
CRITIQUE – QUESTION 2
Bray – Pi – Russell – Tassin – Wang
• Divisor is 20 in tab Q 4, but is 5 in tab Q4, for both average net income and average investment
CRITIQUE – QUESTIONS 4A, 4B
Bray – Pi – Russell – Tassin – Wang
4a)Useful Life (yrs) 20Net income (7.57) SUM(E6:I6)/20 (Sum net income/T years)
4b)Investment 720.22 SUM(E9:I9)/20 (Sum fixed assets/T years)
EMPHASIS – QUESTIONS 6
Bray – Pi – Russell – Tassin – Wang
Pros:
• NPV/IRR – considers time-value of money; reflects benefit to shareholders; comparable to alternate projects
• AAR – conventional for Japanese business practices; ease of understanding
• ACFR – bridges gap between U.S. and Japanese methods
Cons:
• NPV/IRR – difficulty of understanding; not typically used in Japan
• AAR – does not consider time-value of money; depreciation is refunded; not comparable U.S. and other countries’ methods
• ACFR – DCF is not used
• Should have separated A & B in two cells, for clarity
CRITIQUE – QUESTION 7
Bray – Pi – Russell – Tassin – Wang
Average Cash Flow 2,681.01 SUM(E8:I8)/5+I9 (Sum cash flow/T years)
Average Cash Flow Return 78.85% D13/-E11
Our Results
NPV = $461.29
IRR = 8.48%
AAR = -1.051%
ACFR = 78.9%
Their Results
NPV = $455.49
IRR = 10.79%
AAR = -1.051%
ACFR = 78.9%
COMPARING RESULTS
Bray – Pi – Russell – Tassin – Wang