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PT. XYZ is an insurance company that plans to escalate their business area outside insurance in order to increase its profitability through acquiring X Hotel in Bandung. PT. XYZ has two business strategies that are correlated with its acquisition of X Hotel which are, the first, to renovate X Hotel...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/9619 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | PT. XYZ is an insurance company that plans to escalate their business area outside insurance in order to increase its profitability through acquiring X Hotel in Bandung. PT. XYZ has two business strategies that are correlated with its acquisition of X Hotel which are, the first, to renovate X Hotel and then sell it to other party; second is to build Apartment and office building with 18 floors.<p> <br />
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PT. XYZ is to acquire Horison Hotel for around Rp 200 Billion (Debt: Rp 170 Billion and Equity: Rp 30 Billion). Based on historical data and data from PHRI West Java, occupancy rate of X Hotel is 60% for weekday and 80% for weekend. There are two alternatives to be done after the acquisition; first is to operate hotel as before acquisition without changes, second is to upgrade and renovate X hotel. For the first alternative, this project is not feasible but for the second alternative, this project becomes feasible with NPV Rp 29,650,673,394; IRR 14% and pay-back period 5.84 years. The next step is to suggest selling Y Hotel in Bandung to other party and receiving net income after tax Rp 279,141,819,740.53.<p> <br />
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For the next business strategy is to build apartment and office building with a total investment of about Rp 597 Billion. By using optimistic sensitivity analysis through capital structure, the amount of apartment unit sold, and interest of loan, all alternatives shows that the project is feasible with pay-back period of about 8.18 years to 8.47 years. If pessimistic or the worst sensitivity analysis is used, the pay-back period is about 8.47 years to 8.78 years. But not all alternative for this project is feasible, that is, only by using debt to equity ratio of 1:1, this project will be feasible. This project is to be executed for approximately 2 years. |
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