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Totally Amused, Inc. , is a hotel and water theme park innovator which burst into the amusement industry only 10 years ago and has made several big splashes with successful property/facility introductions in multiple states since then. However, the amusement park industry is extremely competitive, so each new venue is built bigger and better than the next to maximize customer enjoyment and park ticket sales.
Totally Amused is looking to take its current indoor and outdoor water park locations to the next level, venturing into an area that is not all too familiar.
Management is considering a big move into the indoor theme park market. Although water parks and traditional theme parks have their similarities, they have many differences. The project consists of a new 100,000 sq. ft. building which will annex onto one side of an existing building.
The indoor facility will feature a first-of-its-kind two-level go kart track, a six-story Ferris wheel (enclosed in glass), 24 lanes of bowling, mini golf, a four-story rope course, and scores of arcade games.
Although this new venture sounds like a walk in the park, an important decision is at hand! The project has reached the stage of determining the financial feasibility of building construction, installing rides, purchasing attractions and other equipment, operating a new style of dry indoor park, and introducing the new venue to current customers as well as the general market.
Management must now decide whether to move forward with the project. To do so, five major areas must be investigated: ? ? ? ? ? Costs of the building construction and interior design Costs of purchasing and installing the rides and attractions Costs of support facilities including snack bar / restaurant Annual operating expenses for the property Annual revenues and associated direct marketing costs.
They have assigned a project manager the task of developing a feasibility study to determine if the investment in this new capital project will meet the company’s financial hurdle rate. We will use the case as a backdrop for our Week 1 and Week 2 discussion. As a class, we will address the discussion as well as augment the information offered by others. PM592_W1_Discussion_Case. docx PM592_W1_Discussion_Case. pdf Page 1.
