An Investment Project Analysis on Taiwan Cinema

• Main Authors: Chen, Daniel, 陳紀光
• Other Authors: Tsai, Chenghsien
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/86384443885762558622

碩士 === 國立政治大學 === 國際經營管理英語碩士學位學程(IMBA) === 101 === The thesis aims at providing an analytical research and evaluation on a movie theater investment based on a real case in Taiwan. Subject investment, a combination of movie theaters and shopping mall, is operated by one of the strongest film exhibitors, fulfilling various entertainment and consumption demands of local people. First, the thesis point out characteristics of film exhibitors in Taiwan, such as concentrating towards urban areas, significant correlation between GDP growth and box office growth, and shifting preference on movies sources. Next, studied company is introduced with its strong market share, occupying as much as 35% of Taipei’s box office. Meanwhile, the location of subject project is also presented with its distinctive features like young age accompanying with high population growth, emphasizing on the balance between good life quality and work, and lower income as well as expenditure on average. With available information and estimations on each variable, we conducted Net Present Value (NPV) to evaluate the project by calculating annual cash flows. The primary initial costs include interior decorating costs, machines and operating equipments procurement. On operation side, major annual costs are film hiring cost and rental of the business area, while revenues mostly comes from box office and sub-lease income. When all cash flows are added up and discounted, the investment project could be able to offer a net present value of about $10 million NT dollars. Furthermore, to have a deeper insight, we also conducted sensitivity analysis, scenario analysis, and had an interview with Chief Financial Officer of case company, discussing about several concerns of the investment; among them, admission rate and sub-lease rate are two most critical issues to be highlighted. Admission rate refers to the audience traffic brought by movies, which correlates to local population, income, and lifestyle. High audience traffic brings in strong consuming volume and accordingly increases the sub-lease rate of the shopping mall. We sum up the case study by giving green light to subject investment project with several suggestions focusing on continuous improvements on admission rate.