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Case study for PMGT6867 (first one)ABC limited is a multinational event management company. Its head office located in Sydney,Australia. Over the time, it has been organising events in different large cities of the world includingDubai, Toronto, London and New York.Project A is to host an education fair for the next three years (2019, 2020 and 2021) in Dubai which isthe largest and most populous city in the United Arab Emirates (UAE). To grant the rights to host thisevent ABC limited will exclusively need to pay 2.75 million AED to the local licensing body as a costof entry. Once receiving the exclusive right, ABC limited will sell stands to exhibitors. According toABC historical data, the number of exhibitors positively correlated with the number of visitors.However, company management requires an analysis of the opportunity whether entering to a bindingagreement of hosting education fair is a right decision or not? (considering the cost of capital is 12%and the profit margin is 22% which is also net cash inflow indicator for ABC Limited).Table1:ABC historical data for visitors and exhibitors (Dubai)YearsVisitorsExhibitors201838000450201733000400201629000360201528000350201425000320Table2:Estimated percentage of exhibitors/stands for different types of organisations (Dubai)Organisation TypeStandtypeNumber of standsPrice AEDUniversity/highereducationA60%oftotalforecastedexhibitors15,000School / primary educationB25%oftotalforecastedexhibitors10,000Other career educationC15%oftotalforecastedexhibitors5,000Project B is to grant the right of hosting career exhibition for two years at the Sydney Convention andExhibition Centre. The company required to invest 5 million AUD to gain the right to host the event.Analysts estimate that the number of visitors for the next 2 years will increase each year (p=0.60),stay same each year (p=0.30) and decline (p=0.10).Table3:Table 1: ABC historical data for visitors and exhibitors (Sydney)YearsVisitorsExhibitors201822000490201721000470201618000410Page1of5
201521000500201419000430Table4:Estimated percentage of exhibitors/stands for different types of organisations (Sydney)Organisation TypeStand typeNumber of standsPrice AUDLarge corporationsPremium25%oftotalforecastedexhibitors50,000MediumsizedbusinessesStandardPlus40%oftotalforecastedexhibitors30,000Small sized businessesStandard35%oftotalforecastedexhibitors20,000

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