Essay on Transgenic Animal with Human DNA - 563 Words

Selective breeding has been around for centuries to improve the flaws of animals. In recent years, scientists have enhanced selective breeding into a whole new evolution of â€Å"transgenic† techniques where the genetic information of another organism is inserted into their genome (Bemis Jo 2011). Despite the fact that transgenic animals are used to study diseases, there are some that argues that transgenic animals are disrespecting the rights of animals. This essay will further outline the both sides of transgenic animal with the question ‘Should transgenic animal with human DNA be permitted?’. The arguments for this includes animal used as a disease model, animal milk, animals’ rights and the side effect of xenotransplantation. There†¦show more content†¦University of California, Davis claimed that they have seen promising results from infant pigs that are fed with transgenic goats milk (ibid 2014). It is said that those pigs health improved after consuming transgenic milk and no faults were found in transgenic goats offspring (ibid 2014). In contrast with the benefits of transgenic animal, some argue that transgenic animal is exploiting animals rights. Animals had to live their life with pain and suffering from deformities and human diseases as they are studied and experimented by breeding animals that consists disease (Animal Liberation 2014). Kelsey Mosher, Pheonix Animal Liberation Squad member and Arizona State University graduate of kinesiology said, â€Å"Were a group of individuals working towards the end of exploitation of animals in every sense† (Armao M 2013). Later on, she added â€Å"Its wrong to submit an individual, regardless of their race, gender, nationality or species, to an experiment without their consent† (ibid 2013). She regarded that animals, although different species from us should be treated the same. For years, scientist have been trying to successfully conduct xenotransplantation, however it did not show promising results. Animals such as primate and pigs are the common animals used in xenotransplantation. Xenotransplantation is where the organism of a transgenic animal with human organism is transplanted into a human body. On October 26, 1984, xenotransplantation tookShow MoreRelatedEssay about Genetic Manipulation or Genetic Engineering952 Words   |  4 Pagesvarious forms of genetic manipulation, including transgenic organisms, cloning, and gene therapy etc. Transgenic organisms, also known as genetically modified organisms (GMOs), are organisms that possess a foreign gene in its genome. This is achieved through recombinant DNA technology, which involves either the combining of DNA from different genomes or the insertion of foreign DNA into a genome. The production of transgenic organisms, particularly animals, is a highly controversial topic and its advantagesRead MoreT he Animals Of The Pigs1653 Words   |  7 PagesThe pigs as shown above in the picture with glowing green snouts are genetically engineered animals known as transgenic animals. Canadian council on animal care (CCAC) defines transgenic animal as â€Å"an animal in which there has been a deliberate modification of its genome†1. Method of Genetic Engineering to produce pigs with glowing green snouts: These transgenic pigs were produced using a technique called DNA microinjection2. For the very first time, 10 piglets with glowing green snouts were producedRead MoreThe Discovery, Process, And Applications Of Transgenic Bacteria1416 Words   |  6 PagesTransgenic bacteria, or genetically modified bacteria, is a type of recombinant DNA organism which uses bacteria as the host for inserting an exogenous gene. This biotechnology has been most widely utilized in medication with a great contribution to the progress of today’s medical science and pharmacy. This research paper introduces the discovery, process, and applications of transgenic bacteria. Furthermore, its advantages, disadvantages, and future directions will also be discussed. In 1953,Read MoreLarge Animal Models For Neururodegenerative Diseases Case Study1695 Words   |  7 PagesLarge animal models for neurodegenerative diseases Numerous human genetic disorders, such as neurodegenerative diseases, occur because of genetic mutations in human cells. New genome editing tools – as of 2014 - such as transcription activator-like endonucleases (TALENs) or CRISPR/Cas9 further ease the precise generation of non-human primates (NHP) models for human diseases. Several of these NHP models displayed clinical manifestations like those of human disorders, in comparison with rodent modelsRead MoreThe Advantages and Disadvantages of Genetic Manipulation: Transgenic Animals738 Words   |  3 PagesThe Advantages and Disadvantages of Genetic Manipulation: Transgenic Animals Introduction Over the last few years, technology has been constantly developing; it has developed to the point where manipulating genes are possible; mainly used to benefit both ourselves and the society. Genetic Manipulation also commonly known as genetic engineering or genetic modification, according to the dictionary, is defined as the ‘scientific alteration of the structure of genetic material in a living organismRead MoreIs the Use of Transgeneric Organisms Essential to the Advancement of Therapeutic Medicine?1315 Words   |  6 Pagesagriculture and industry. Genetically Modified or transgenic organisms are organisms that have been genetically altered in a specific way for a particular purpose. It is now possible for scientists to exchange genes from one species of organism to another. This process is performed when certain characteristics of one organism are desired in another organism of a different species. For example a pig could be genetically engineered so that it will produce human insulin for those suffering from diabetes. AlsoRead MoreA Study On The Protective Immunity928 Words   |  4 PagesIn this study, the CRPV/HLA-A2.1 transgenic rabbit model was used to assess the protective immunity generated by DNA vaccines delivered using the gene gun, the tattoo gun or the microneedle system. The focus was to determine whether the tattoo gun and the microneedle delivery systems were useful DNA vaccination alternatives to the gene gun. Our laboratory has successfully utilized the gene gun in our DNA vaccination studies for both protective and therapeutic purposes (17,34). However, the gene gunRead MoreGenetic Engineering : Genetically Modified Organisms Essay1293 Words   |  6 Pagesas recombinant DNA technology/genetic modification is a science that employs molecular biology techniques so as to modify or alter the genome of an organism. It involves manipulation of an organism’s genome directly by use of biotechnology. Typically, deoxyribonucleic a cid (DNA), which is an exogenous genetic material, is inserted in the host genome. This is done by isolating and copying the genetic material in question using a method known as molecular cloning so as to generate a DNA sequence. ThatRead MoreThe Potential of Transgenic Organism889 Words   |  4 PagesA Transgenic Organism is an organism that’s genetic material has been transformed using a technique called genetic engineering. This modification contains the mutation, insertion, or deletion of genes. When there is an insertion of genes, they are most commonly from a different species, this is known as horizontal gene transfer. Another way genes can be transferred is in nature, when exogenous DNA (DNA originating outside an organism that has been introduced into the organism) gets through the organismsRead MoreGenetic Engineering : The Field Of Biomedical Research1710 Words   |  7 Pagesexperimental practice used in the world of biomedical research. This practice refers to humans modifying an animals’ genetic component in order to express a particular trait (Dale et al). The scientific community calls the animals produced by this practice as transgenic animals in order to distinguish between its wild type relative. This innovative technology paved ways for medical breakthroughs, along with the expansion of human understanding towards the mechanisms of prevalent diseases. As a result, research

What Makes A Marketing Plan - 895 Words

 · In addition to CMOs, why do you believe so many other employees participate in marketing planning? Putting together a marketing plan is often labor intensive and as a result, can often take many employees from several departments. In addition, because a market plan is essential to the success of the company it simply requires many people each contributing in their particular area of expertise. For example: You may need a team to do a competitive analysis of similar products, to see how your product stacks up to others in the marketplace, and there may be a need for test marketing. (Tanner Raymond, 2010,) Similarly, a marketing researcher might be needed, or even a sales manager to forecast how many units can be sold all, furthermore, executives are involved in the planning and approval process, which means the team size, might grow quite large before the plan is completed. The marketing plan is essential to keep the sales of a product continually growing. Just how essential is a marketing plan? Let s take a look at a plan gone wrong. Image courtesy of (Edwards Minato, 2013) For example: When Ron Johnson took over as CEO of JcPenney in November of 2011, by February 2012 stocks surged to over $42.00 a share in anticipation of major growth of the retail company. However, by April 2012, not only was 10% of the corporate staff laid off, but in addition more store managers than JCP was willing to admit. (Edwards Minato, 2013) The new â€Å"no sale† marketing campaignShow MoreRelatedWhat Makes A Good Marketing Strategy Plan? Essay1366 Words   |  6 Pagesto establish facts and reach new conclusions. In this research project I will be mainly looking at the marketing strategy plan and do a thorough search on this topic. The project will have 6 sub-sections. Namely, the review of literature, methodology, processing of findings, conclusion, reference list and the appendix. Helping me to answer the question ‘What make a good marketing strategy plan?’ is the feedback on the questionnaires that I will compile and send out to companies. The questionnairesRead MoreThe Importance of Marketing Plan in Telecommunications Industry1406 Words   |  6 Pagesneed, and promoting them using marketing techniques. These techniques cannot be applied without marketing plan. Marketing techniques are the tools used to identify the most appropriate ways to employ in order to make profits. These techniques can be public relations, trade and consumer promotions, point-of-sale materials, editorial, publicity and sales depending on the nature of services that organization provides. Marketing as defined by the American Marketing Association in Kotler (2009) isRead MoreMarketing Plans: Analyzing the Product Success of Coca Cola1183 Words   |  5 PagesIntroduction Marketing planning is a key to either success or failure of products in marketing management. This paper analyzes the meaning of a market plan and how it has helped the product or services to be more successful and on the other side, how the market plan has made the product to become of great failure in most organizations. The paper will also analyze an overview of some movies considered to be a failure as well as, extrapolating the problems in studios plan, forecasting at the demandRead MoreWhy Do Healthcare Practices Need a Marketing Plan?793 Words   |  3 Pagesadvertising and marketing efforts for the coming year is known as a marketing plan. A marketing plan includes a statement of the marketing situation, a discussion of target markets and company positioning and a description of the marketing mix intended for use in reaching marketing goals (entrepreneur.com, 2012). A second definition of a marketing plan is as follows: a plan that describes the activities involved in achie ving certain marketing objectives within a given timeframe. A market plan starts offRead MoreHow Do You Describe Marketing Mistakes? Essay919 Words   |  4 PagesHow do you describe marketing mistakes? Just ask five marketing experts and you’ll at least 50 descriptions of what people do to mess up their marketing campaign. However, there are some major mistakes that many companies make that can derail the most basic of marketing operations. After all, if you can’t get the basics right, it is going to be difficult to manage the finer elements of your plan as well. So much about marketing depends on your product or service. While every industry is differentRead MoreORGANIAZATIONAL MANAGEMENT final1472 Words   |  6 Pages Q4: What are main elements of a Marketing Plan? Executive summary: The main purpose of writing this report is to explain what are main elements of a marketing plan. To deeply understand what are main elements of a marketing plan, defining marketing plan and being aware of the importance of marketing plan first is necessary. Marketing plan basically consists of description of the target market, competitors, and product or service, marketing strategy,Read MoreMarketing Plan For A Marketing Strategy1205 Words   |  5 Pages Any company, of any size that is successful in marketing always starts with a marketing plan. Large companies have plans with hundreds of pages; while small companies can get by with a half-dozen sheets. You should at the very least refer to it quarterly, but better yet monthly. By adding monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan. Any marketing plan begins with an assessment of your company’s current situation. This should include theRead MoreProduct Marketing Plan For Marketing1683 Words   |  7 PagesProduct Marketing Plan In the business, the world, marketing is the trade of introduction of inventors and corporations to the consumer. This trade will be in the regards to marketing the product and/or services also the invention. Marketing point will be conducted with a series of surveys, test groups and information collected for a target marketing segment. In these, conduct informational studies, the marketing will figure to correct target market, consumer and the supply and demand of the productRead MoreMarketing Plan For Product And The Managers1211 Words   |  5 PagesSecond, marketing helps the business find out customer needs, use different selling plan to improve the sale of the goods or services and then satisfy the needs. Marketing design the plan for the product and the managers can follow the four condition, product, price, place and promotion, means the 4Ps of marketing, to decide the final plan. Understanding the customer needs are important in marketing. Because different type of custome rs have different needs. Then, customer always be the main focusRead MoreWhy Do You Believe So Many Other Employees Participate At Marketing Planning?855 Words   |  4 Pagesemployees participate in marketing planning? Putting together a marketing plan is often labor intensive and essential to the success of the business, subsequently, often many departments will contribute in their field of expertise. For example: You may need a team to do a competitive analysis of similar products, to examine how your product stacks up to others in the marketplace, and there may be a need for test marketing. (Tanner Raymond, 2010,) Similarly, a marketing researcher might be needed

Having a High Self

Having a High Self-Esteem Essay Self esteem is instilled in us at a young age. My mom always taught me how important it was to have confidence in myself and that no matter what anyone thought, it’s always important to believe in myself. If you don’t have confidence in yourself its hard to look in the mirror and think wow, I look great today. Improving your self esteem increases your confidence and it’s the first step towards a happy life. Self concept and who we think we are is very important in ones life. When I say I am ambitious, I am amazing, I am goal oriented, I am loving, I use these words to describe myself because I am confident in myself and believe these things. The characteristics we use to describe ourselves and how we view ourselves are important because it relates to how we act and communicate with people. Self esteem is important because it influences how we approach people and how you react in communications and relationships. As a child, if people such as classmates or siblings make fun of you or made you feel negative about yourself, you will believe these negative things and in some way let it shape your life. We are more likely to believe things once weve heard them repeatedly and especially from the people who we find to be credible. In most cases, one cares how they look in the eyes of other people. You may not even realize but when you put on makeup, dress a certain way or ask someone if â€Å"these jeans make you me look fat? † This is because you are concerned how others may view you. If someone tells you yes, those jeans make you look fat; you may begin to view yourself as less attractive. If that someone is a credible person and they say the jeans look good on you, you will feel appealing. Society and the people around you can alter your self esteem, unless you are just a cocky individual and nobody’s opinion matter. This refers to Charles Cooley’s, The Looking Glass Self; you see the image of yourself that others reveal to you. In order to possess a positive or healthy self concept you must know yourself, love yourself and be true to yourself. How you view yourself determines how you will experience life. If you see yourself in a positive and healthy way, your life experiences will be positive and healthy. Sometimes I feel like its okay to have high self esteem but not always be confident in yourself. Personally, I feel like I have my good days and my bad days, especially on a good hair day. I feel like a super model on a good day and a homeless person on a bad day. It’s important to have confidence in yourself because if you don’t, nobody else will. I am a great friend. Whenever a friend of mine needs a shoulder to lean on or a favor, I feel like I am always there to help them. The more I feel like I am a good friend and my friends agree with this, this is my self fulfilling prophecy. My prediction is fulfilling because I am acting on this as if it were true. Society shapes us in many ways. On instagram recently there was a challenge called â€Å"#PrettyFaceChallenge. Similar to the Ice bucket challenge, but has less meaning. The idea is for woman to post a collage of pictures of themselves wearing no makeup and using no filter. The goal is to nominate your friends whom you choose to be pretty. Than they do the challenge if they choose and nominate their friends as well. This is society shaping us by having our friends decide if were pretty. In a way it’s boosting our self esteem by being nominated and â€Å"feeling pretty. † I am motivated. I am a hard worker, I have drive, I have ambition. I have nice skin, I have great communication skills, and I am a great partner. Having confidence in ourselves goes beyond physical appearance and has a lot to do with living a healthy and happy lifestyle.

Accounting for Managers

Question : Discuss about the Accounting for Managers ? Answer : Introduction: Gola and Costa set for establishing a business of selling fruit juices. The location of the shop is inside Shopping Arcade and nearby a supermarket. Their plan is to provide fresh juices to their customers, earn a significant amount of profits and sell off the same in the future course of time. They will follow just in time for inventory management. Gola is under the impression that they will be successful in earning profits by controlling their cost as he believes that for running a successful business, only profitability is the foremost criteria. Posta believes that their business will be successful due to their choice of location and due to the eating habits of the people. Since there has been a significant shift in the eating habits, people have become more conscious for their healthy well-being and this was one of the reasons why both the entrepreneurs had propagated such kind of idea of business. Arrangement of funds, costs and investment: As an Aspiring MBA graduate studying accounting for managers and being there friend, I can make them understand and analyse many other aspects apart from profitability and location of business. Since I am specializing in the field of Management and Finance I can help them in some statistical analysis which they are significantly missing on their part. Before setting of the business, it is very important to discuss the kind of industry in which they are supposed to enter a detailed analysis is required to be done right from the point of financial investment to related cost both fixed and fluctuating , expected return in fair terms. It is also relevant that they search for their competitors and analyse their business as for how they are creating an impact in the business environment. The location of the business, which they have decided is quite favourable. However, to achieve the same, both of them have to make a significant investment in terms of leasing. It refers to borrowing the property against paying for its value for a significant period of time. For this, they have to enter into an agreement with the lessor of Shopping Arcade. It is equally important that they understand the terms and conditions of leasing properly and should have a lease term of 5 years so that they can cover all their cost during this period of time (BusinessDictionary.com, 2016). For the purpose of investment, they need to have availability of funds. It is required that they approach a bank who can arrange for their finance. They need to convince the bank regarding their potential profitability of business. For this, they should have the significant backup plan on paper which is able to prove with reasonable estimates and assumptions that their prospective business is a successful plan for the future. It is also important that they should be aware of the cost of capital which will be required in their leasing terms. After arranging the significant amount of loan and arranging the same for the lease the next part is to analyse various types of cost associated with their business. Cost can be divided into fixed and variable component. For example, fixed cost will be the lease amount which is to be spread for the period of 5 years cost. Blending machines, refrigerators, furniture, benches washing up sinks, falls into fixed cost. Variable cost will be the cost of raw materials like all those fruits which will be purchased on a daily basis. Fixed costs remain the same irrespective of the level of output while variable cost changes as per the level of output. Variable cost can increase or decrease as per the level of production but fixed cost remains the same throughout the level of production (Boundless, 2016). After analysing all the significant cost, the next component is the break-even analysis. Break even analysis refers to the function where it is required to determine what is required to sell on a monthly or annual basis in order to cover the cost of doing the business. Like, if fixed cost is $2, 00,000 and expected contribution will be $4, break even will be $50,000. This means they will earn profits after covering $50,000(Cleverism, 2016). Setting up of standards and its importance: It is also required to set a standard for sales. This will act as a benchmark for their business as how much is required to earn in order to cross the level of breakeven point and earn a significant share of profit. By setting up standard it can be later compared with the actual sales figure. Like, for first quarter sales expected is $15,000 but actual sales was $18,000. Thus, it is a favourable condition for them as actual has exceeded its standards. With the actual figure and standards, variances can be computed for the future relevance (AllBusiness.com, 2016). The reason behind the setting up of a standard is equivalent to setting up of short term goal which will be quite helpful in achieving a long-term goal for the business. For cost, monthly expected expenditure is $10,000 but actual came to $12,000. Reason for extra $2,000 will be analysed and corrective action to be adopted for the same. Budgeting helps us to identify unnecessary expenditures and in making us adaptable towards the frequent changing financial position of the business. Budgeting ensures that we will have sufficient amount of money in order to meet the requirement of the business. It will be advisable to Gola and Costa that they should understand the essence of budgeting and implement the same for the success of their business. The concept of budgeting will help Gola and Costa immensely. It is an important tool which will control the flow of money in their business. It will also ensure that their business will turn out to be very effective and efficient in the long run ( Mymoneycoach.ca, 2016). One of the main reasons behind the term of the lease is to cover all kind of fixed cost during that period. Since it is the plan of Gola and Costa to sell off their business in future, it is required that their business should run in scientific and profitable manner. For this, they need to understand the relevance of documentation in terms of recording finance, lease papers terms of bank loans etc. The prospective buyer will analyse the business in his own way. Unless and until he finds its economically viable, he will not take over the business. Now, economic viability can be analysed by way of proper maintenance of records, lease papers, bank loans terms, and conditions etc. He will analyse that whether the said business was profitable or not. Whether the bank loan taken has been paid off and all other statutory dues or complied with or not. Lease papers will also be verified. This needs to be understood by Gola and Costa since the beginning of their business. It is very important that they should keep in mind since the beginning regarding selling off their business in the future course of time. This will drive them more proactively to achieve their short term plan which is in the form of standards. By achieving the short-term standard, they will be able to achieve their ultimate aim, i.e. profitability. Unless and until the business is not profitable, it won't remain attractive for the prospective buyer to take over the same in future. It is also important that the business gains popularity amongst the consumers. This will help in creating the brand image for Gola and Costa and will it yield in terms of goodwill while selling off the business. Both the buyer and seller will be in a profitable position if a business has developed a brand image of its own in the market. Conclusion: The whole process is beyond the concept of capital investment decisions. It involves the role of management accounting as in terms of setting targets and achieving the same, producing raw materials i.e. inventory management, handling the customers and creating a favourable image in front of them etc. So, apart from having the knowledge of finance, it is equally important that Gola and Costa should be aware regarding management accounting and other important aspects. With the help of the above-stated concept, it will help Gola and Costa to have the efficient and effective setup of business. To conclude, it is required that Gola and Costa should not only rely on the concept of profitability or location of business. They should be quite aware regarding the concept of break-even analysis, an estimate of sales and setting up of targets, different types of cost involved and their implications, importance of budgeting in their business, arrangement of investment with the help of a loan from bank and requirements for selling off their business in future. By following these above concepts of finance and management accounting, they will surely succeed in their attempt for a successful venture (Debitoor.com, 2016). Reference AllBusiness.com. (2016). Creating a Budget and Sales Forecast | AllBusiness.com. [online] Available at: https://www.allbusiness.com/creating-a-budget-and-sales-forecast-977-1.html [Accessed 11 Dec. 2016]. Boundless. (2016). Types of Costs. [online] Available at: https://www.boundless.com/economics/textbooks/boundless-economics-textbook/production-9/production-cost-64/types-of-costs-240-12338/ [Accessed 11 Dec. 2016]. BusinessDictionary.com. (2016). What is a lease? definition and meaning. [online] Available at: https://www.businessdictionary.com/definition/lease.html [Accessed 11 Dec. 2016]. Cleverism. (2016). Break-Even Analysis: What, Why, and How. [online] Available at: https://www.cleverism.com/break-even-analysis/ [Accessed 11 Dec. 2016]. Debitoor.com. (2016). Management accounting - What is management accounting? | Debitoor. [online] Available at: https://debitoor.com/dictionary/management-accounting [Accessed 11 Dec. 2016]. Mymoneycoach.ca. (2016). What is Budgeting and Why is it Important? | My Money Coach. [online] Available at: https://www.mymoneycoach.ca/budgeting/what-is-a-budget-planning-forecasting [Accessed 11 Dec. 2016]. Accounting for Managers Question: Managers frequently use CVP Analysis and Budgeting to screen business plans by evaluating a firms cost structure and sales volume needed to generate profit. Mountain Views Hotel is planning to open a Boutique Hotel accommodation in the Blue Mountains area that runs a Food and Beverage operation serving breakfast as part of the guest experience. Your team is expected to develop a successful business plan including making recommendations for improvement in future years. The Report will be written as if it were being presented to potential investors in the business. Use the Balanced Score Card approach to present key assumptions and justify them by research and analysis undertaken. Discuss critically key results that would impact on your future decision-making including a fully supported explanation of how you could improve this business by making any changes. Make recommendations to the proposed investors including ideas for the next steps to progress the business concept. Prepare your analysis as an authentic business report. Answer: Introduction The Australian tourism and hotel industry have significant contribution on GDP (Gross Domestic Product) of Australian. As per Price Water cooper house Report of 2009 it is estimated there are 6807 hotels employing almost 188000 people in Australia. The market outlook indicates that the hotel industry has matured because the numbers of hotels have declined over the years and also the income growth of the industry has been minimal. But the situations are seen improving as the 2015 data suggests that both domestic and international visitors have increased. There has been 8.2% growth in international visitors and 7% growth in domestic visitors (Hall, 1991). In this report a business plan is developed for Mountain View Hotel analyzing the business opportunity of Boutique Hotel in Blue Mountains (Hardiman Burgin, 2011). For this purpose the hotel industry of Australia, tourism opportunity in Blue Mountains and the projected financial data of the proposed Boutique hotel are analyzed to develop an effective business plan and also to evaluate the investment decision. Objectives The objectives of the Mount Boutique Hotel for first few years are: Achieving customer satisfaction and exceeding customers expectation; Achieving 90% occupancy rate during peak period; Recruiting and training efficient staffs. Mission The mission of Mount Boutique Hotel is to become the preferred choice of customers in Blue Mountain area. Company Summary Mountain View is a well known hotel chain that is currently running a restaurant in Blue Mountain. It is planning to open a boutique hotel in Blue Mountain. Market Analysis Australian Tourism and Hotel Industry The international and domestic visitors are expected to surge giving a positive outlook for the overall hotel industry. As per the economic forecasts data it is expected that international visitors will grow by 5.3% per annum for next three years. This growth in tourism numbers will have a positive impact on the Australian Hotel Industry. The demands for hotels are expected to grow by 3% per annum in next three years. There is an increasing demand supply disparity in hotel industry as a result it is expected that room rate will grow by 2.9% by 2018 (Anderson, 2006). It can be concluded that Hotel Industry of Australia is looking good and it is the opportune moment to make investment in this sector. Analyzing Blue Mountain as Investment destination The Blue Mountains is just two hours away from Sydney and it is a perfect holiday destination for anyone looking for a break from hectic life style. The blue Mountain offers spectacular scenic beauties like Three Sisters at Echo point, dinning, shopping, spa, bush walking and other natural attraction (Hudson Lang, 2002). It is an ever growing tourist destination with tremendous growth potential. From an hotelier point of view the current market scenario offers an excellent investment opportunity in Blue Mountain. Product Analysis There is a growing optimism in hotel industry because of positive macro economic developments. Being in tune with the overall market sentiment Mount View hotel has decided to start a Boutique Hotel in Blue Mountain. Boutique hotels are much smaller in size but they are stylish and unique further it tries to provide separate experience than that of corporate run hotels (Presbury et. al., 2005). The advantages of a boutique hotel are: It requires less investment; Occupancy rates are also high as there are only few number of rooms; Fixed cost is less because the size is small; It does not provide variety of services so its variable cost is also low. The above analysis shows that Mount View hotels decision to open a boutique hotel in Mount View is justified. Financial Analysis Cost Estimation The aim is to become the best in class boutique hotel in Blue Mountains (Bruner, 1998). It is estimated to have total eighty rooms out of which 30 rooms will be high end deluxe rooms and there will be 50 standard rooms. The deluxe rooms will include king sized bed, a desk, a mirror and a color television. Further the bathroom of the deluxe room will be of four to five meters with a sink, toilet and shower. The total estimated cost for starting the Boutique hotel is $754800.00. The details are given in the table below. Start Up Funding Start Up expenses to fund $654,800.00 Start Up Assets to fund $100,000.00 Total Funding Required $754,800.00 To fund the project a mortgage loan of Rs. 500,000.00 is to be obtained at 8% per annum. The remaining fund of 254,800.00 is to be provided by Mountain Views hotel. Cost Volume Profit Analysis The viability of any business plan is determined by analyzing its projected financial performance. The business plans are often screened for determining their financial viability by using cost volume profit analysis (Scapens, 1985). The CVP (Cost Volume Profit) analysis helps in determining the effect that costs and volume has on profit. The Cost Volume Profit (CVP) analysis are often performed to determine the future activity and to provide valuable insight on: Which services or product are to be emphasized; To determine the volume of sales that is required to achieve targeted sales; The minimum revenue that is required to achieve break even; The level of risk that an organization is exposed to because of the fixed cost; Assumptions of CVP Analysis There are certain assumptions that are made while performing CVP (Cost Volume Profit) analysis (Drury, 1992), they are: Per unit Sales price is constant; Per unit Variable cost is constant; Total Fixed cost is also constant; Every units produced are sold; Change in costs are due to change in activity; In case more than one product is sold then they are sold in same mix. Cost Function The cost function is a process of dividing the total costs into fixed costs and Variable Costs (Binswanger, 1974). The total cost can only be ascertained after the estimated financial statement is prepared. The projected financial statements are prepared on the basis of certain assumptions and they are: The operating costs are determined by the management based on the research of similar hotels, The fixed start up cost is amortized over the years, The room occupancy rate was calculated for both the deluxe and standard rooms on the basis of seasonal demand. The first step of performing the Cost Volume Profit Analysis is to estimate the cost functions. On the basis of the projected financial statement each cost is determined as either fixed or variable costs. In the projected financial statement of Mount Boutique Hotel the estimated variable costs is $ 2234605.00 which is $96.49 per unit and the estimated fixed cost is $3153904.00. The estimated fixed costs include Direct Labor costs of $803,040.00; overhead costs of $1696084.00; selling expenses of $259850.00 and administrative expenses of $394950.00. The estimated variable costs include direct material of $88.49 per unit and over head of $8.00 per unit. Contribution Margin Ratio The contribution is calculated by deducting Variable costs from sales. So the contribution margin ratio is that part of the sales that exceeds variable costs (Garrison et. al., 2003). It can be used to pay fixed costs. The contribution margin ratio measures operational efficiency, a higher ratio suggests higher efficiency. In the projected financial statement of Boutique hotel estimated sales is $6995325.00 and estimated variable costs is $2234605.00. The contribution margin comes to $4,460,720.00 that is 66.60% which is very high. It suggests that only 33.40% of total sales cover the variable costs and the remaining 66.6% is used to meet the fixed costs and earn profit. It can be reasonably concluded that any sudden increase in cost will not affect the profitability of the hotel because it has high contribution margin ratio which is a very healthy sign for any business. Calculation of Contribution Margin Particulars Amount Sales $6695325.00 Variable Costs $2234605.00 Contribution margin $4460720.00 Contribution Margin Ratio 66.6% Break even Sales The break even sale represents that level of sales where the profit is zero. At this level total sales revenue is equals to total variable costs and the contribution margin is equal to fixed costs (Blocher et. al., 2008). The break even sale is an important level because sales below this level will result in losses and sales above this level will lead to profits. In the projected financial statements of Mount Boutique hotel total fixed costs are $3153904.00 and the variable cost per unit is 192.60 so the break even sale comes to $4733857.83. The total estimated sale is $6695325.00 and the 70.70% of it is Break even sales. This means that business needs to achieve at least 70% of the estimated sales to attain no profit no loss situation otherwise it will make losses. This is a very high percentage and implies that there is a very heavy burden of fixed costs on the business. It is suggested that business should re estimate its fixed costs structure and try to reduce the Break even sale s to 50%. The hotel should cut down fixed costs by $4399091.00 to attain the targeted break even sales. Particulars Amount Fixed Costs $3153904.00 Contribution margin $4460720.00 Break even sales $4733857.38 Margin of safety The margin of safety is that part of the total sales that is above Breakeven Sales. It is calculated by deducting breakeven sales from total sales. The Margin of safety is a valuable indicator of profitability of an organization (Shih, 1979). It also indicates to the management how reduction of revenue will affect the break even of the organization. The higher the Margin of safety the better it is for the business. Because a low Margin of safety suggests increase in fixed costs, extra discounts or increase in prices by suppliers. So it is important to monitor margin of safety ratios. In the projected financial data of Mount Boutique hotel the total expected sales is $6695325.00 and the break even sales is $4733857.38 so the margin of safety is $1961467.62. The margin of safety ratio comes to 29.30% of total sales. It is suggested that Margin of safety ratio should be improved. It can be done by improving sales or reducing breakeven point. Operating Leverage The Operating Leverage is the analysis of relationship between fixed costs and variable costs. It is calculated by dividing contribution margin by income from operations. The operating leverages are high for companies that have large fixed costs in their total operation costs. A higher operating leverage suggests that every increase in sales will multiply profits when the breakeven point is reached (Lev, 1974). But if breakeven sales are not reached then higher operating leverage will intensify losses. So with high operating leverage a high level of risk is involved. In the estimated financial statement of Mount Boutique hotel the contribution margin is $4460720.00 and Income from operations are $1306816.00 so the operating leverage comes to 3.4 times. This means that Contribution is 3.4 times more than income from operation so it can be derived that fixed costs are 2.4 times of income from operation which is very high. So it is suggested to take necessary measures to reduce fixed co sts. Conclusion The overall projected financial statement of Mount Boutique hotel indicates that it is a high return low risk business opportunity for any investor. The high breakeven sales and low Margin of safety is due to higher fixed costs (Alexander, 2001). The burden of higher fixed costs is due to the amortization of start up costs in initial years as it gets completely amortized then fixed costs will certainly come down thus improving the margin of safety and break even sales figure. The market analysis has shown that it is an opportune moment for any investor to enter into tourism sector. The expected growth figures are very attractive and it is also estimated there will be a shortage of supply as the increase in demand is much higher than that of supply (Jennings, 2001). If the overall macroeconomic views are considered then globally major economies are improving so it is expected that international visitors will surge in coming years. The Mount Boutique hotel will be one of its kinds in Blue Mountains. It will offer a unique experience to its visitors because of its prominent location and customized services. 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