CBE Fitness Gym celebrated its 9th year of operation last December. The Fitness Gym has earned its reputation as one of the most effective of its kind in the locality. They are currently serving twenty individuals at maximum. The gym features different equipments and instructors at low price. Finally, it has its own shower room for tired individuals.
The past years have been blessed for CBE Fitness Gym. The gym has steady revenue annually. It experienced ups and downs but not experience negative revenue. Because of this, the owner is planning for an expansion.
As a result of the owner’s conception, the operation manager made a proposal for the expansion. Basically, the proposal aims to renovate the whole gym to accommodate additional equipment, thus, increasing the gym’s capacity to serve more people. This meant heavy investment on equipment and fixed asset, additional labor and expansion of space. The proposal was based on the performance of the gym for the past years.
The expansion plans to double the capacity of the gym. It will add up facilities that could accommodate another twenty to twenty five persons. The proposed budget for the expansion is P2, 000,000.00.
Expanding the gym comes with risks and uncertainties. This move does not guarantee additional profit nor ensures minimization of expenses, to make the point clear; it is not guaranteed that the investment will be worth it. Because of this, the decision to pursue the project will be based on different projections. The administration also identified a twelve percent (12%) rate of return for the investment.
ESTIMATED BUDGET ALLOCATION
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