Capital Expenditure Request (CER)
Construction of Capital Cinema

Contents

Purpose Statement 4
Background 4
Current Situation 4
Solution 5
Market Research 6
Layout Plan 9
Ground Floor 9
First and second floor 12
Work Breakdown Structure and Scheduling 14
COST ESTIMATION 16
CONSTRUCTION COST BREAKDOWN CHART 19
TOTAL COST BREAKDOWN CHART 19
Financial Analysis: 20
Return On Investment: 21
Cash Outflows 22
Break Even Analysis 23
NET PRESENT VALUE (NPV) 24
Appendix 25
WBS 25
Survey questions: 26

Purpose Statement

The purpose of this Capital Expenditure Request (CER) is to request funding approval in the amount of $13,172,280 for the construction of the Capital Cinema.

Background

Capital Cinema, Inc. has been doing business as Capital Theatres and CT (Capital) Entertainment. This is a China and North American based movie theater chain.
Capital Cinema, Inc., was founded in 1974, in Tianjin, China. It currently has its headquarters in Beijing, China, as well as a US headquarters in Denver, Colorado.
Basically, Capital Theatres chains concentrates on basic movie theaters whereas CT or Capital Entertainment concentrates more on high end movie theaters that include video game areas with arcade sections as well as sophisticated lounge space.
Currently, there are 127 Capital Cinema Theaters across the United States and 48 in China.

Current Situation

The town of Montvale has always been known to be a very small town. Therefore, over the years, their teens have constantly just been used to visit their neighbor’s towns when needed to go to the movies perhaps, or the moms do the same when needed to go shopping.

However, the population of the town has grown immensely over the past 10 years. Presently the closest movie theater is 4 towns away. The town recently built a shopping plaza with a diverse selection of clothing stores as well as a good variety of restaurants to attract locals to bring in revenue to the town, however, 50% of the population, (65% of them being teenagers) still opt to drive to different towns because of the option they have to also watch a movie or just to “hang out” with friends.

Solution

Build a Capital Entertainment Theater that will include:
High end movie theaters
Video game areas with arcade sections
Sophisticated lounge space
Refined food court
Capital Cinema will help increase the town’s visibility not only to locals but hopefully to outsiders.
Provide the town’s teenagers (age group) to have a place to go (hang out) closer to home.
Bring more visibility to the newly created shopping plaza

Market Research

We want to make our cinema more popular and have more audience. So we made a market survey to find out their needs. Our survey’s objects are random audience who go to cinema, not only to some limited kinds of spectators. The survey has some simple questions that will show audience’s need from cinema. With this, we can make our cinema better and better. The questionnaire can be found in Appendix.

We collected 72 questionnaires in 5 days. The result is shown below:

We can find that more females come to the cinema than males. So I think we should offer some specific services for women.

I can understand the result of the audience’s age range. Children under 15 usually want to play with their friends outside but not to watch movies. People between 15 and 35 years’ old are the main audiences for the cinema. They have incomes or pocket money from their parents. They go to cinemas with their boyfriend, girlfriend or spouse. People over 35 go to cinema less and less.

This chart shows that more audiences go to cinema after work or school than other time.

In now world, people can enjoy movies in their homes, but still many audiences prefer to go to cinema to enjoy the feeling in the cinema, like big screens, audio equipments, the atmosphere and other reasons.
Layout Plan

Total Area: 55,500 sq. feet (18,500 sq. ft. is footprint area, 3 floors. The