355 Review - Prelim 1 - o do not fund all capital out of...

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26/02/2007 19:29:00 If we invest in something large, we consider it a Cap Ex.  Not a day to day purchase  Although most things installed in a hotel could be considered Cap Ex, we  generally do not capitalize such things (paint, bulbs, etc) Try not to capitalize everything (have to depreciate them) Things we invest in the building o Large ticket item o Not done often (every couple of years) Large computer update, software, linens, pieces of equip  Where does the money come from?? o Budgets are not money (spent not created) o Comes from “reserve for replacement” 3-5% of gross revenues  o account accumulates over time whatever is left over from this year, can be spent next year
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Unformatted text preview: o do not fund all capital out of current cash flows o set money aside, can supplement Always use the Peak demand Always hit the peak during high demand Know what lamps to be used where Hazards (exploding, disposal, mercury) Efficiency Mold/Asbestos Structural issues Health concern Remediation Lead is the associated hazard with peeling paint Think about how the space is going to be used Whos going to be in the space Do not disturb the lead, as to make it airborne 26/02/2007 19:29:00 26/02/2007 19:29:00...
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355 Review - Prelim 1 - o do not fund all capital out of...

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