Maximizing Revenue and Minimizing Expenses: A Study on the

School: University of British Columbia - Course: COMM 298 - Subject: Accounting

Current situation Revenue Group Classes€900,000.00 Private Classes€187,200.00 Net revenue€1,087,200.00 Expenses Pilates reformers€4,400.00 Renovation€3,000.00 Web maintenance€1,067.40 Training Cost €750.00Accounting Cost€600.00Cleaning Cost€1,200.00Electricity€300.00 Other consumables€1,000.00 Wages €23,520.00 Total expenses€35,837.40 Earnings€1,051,362.60Training Cost, Accounting Cost, Web maintenance, Cleaning Cost, Electricity, Other consumables, and Wages

Year01234 Capital outlay or upfront costs New studio renovation(2,000.00) Reformers(24,000.00) SPX professional reformers(4,000.00) Revenue (all group) Group classes630,000.00 945,000.00 1,197,000.00 1,197,000.00 Incremental Costs Rental fee(30,000.00) (30,000.00) (30,000.00) (30,000.00) Substitute instructors(1,500.00) (1,500.00) (1,500.00) (1,500.00) Wages(23,520.00) (23,520.00) (23,520.00) (23,520.00) Utility(300.00) (300.00) (300.00) (300.00) Accounting Costs(500.00) (500.00) (500.00) (500.00) Cleaning Fees(1,200.00) (1,200.00) (1,200.00) (1,200.00) Other Consumables (1,000.00) (1,000.00) (1,000.00) (1,000.00) Bonus / Retreat (58,020.00) (58,020.00) (58,020.00) (58,020.00) Annual cash flow(30,000)€571,980.00€886,980.00€1,138,980.00€1,138,980.00 PV of Cash Flow(30,000)€539,603.77€789,409.04€956,309.57€902,178.84 NPV€4,013,096.89PROCEED Discount rate 6%