The purpose of this analysis is to determine whether or not the approval of sports betting would help Central increase gambling revenue. I will conduct this analysis by building a Decision Support (DSS) model that forecasts the proposed sports betting program’s financial situation for the next 10 years. This model will be used to provide proper reasoning for the approval or disapproval of the sports betting proposal; also I will use this model to support and explain my recommendation on the matter of sports betting.
DSS Model: Summary and Analysis
The results illustrated below analyze the Net income, Cash on hand, Debt owed, and Average return on investment for the year 2018 using the four pre-defined scenarios, including Low roller (monopoly), High roller (monopoly), Low roller (competition), and High roller (competition). These scenarios represent the best case and worst case scenarios and help us examine the results under different variables. For the purpose of this memo all results are illustrated below and are expressed in the year 2018 because the statements in this year, being the last year for our purposes, will provide the most comprehensive results for the purpose of our analysis.
According to the Decision Support model (summary included below) designed for this case only one scenario yields positive results in 2018; that scenario being the High roller (monopoly) scenario and all others yield negative results. The net income is negative in most scenarios, with the exception being the High roller (monopoly) scenario, implying that the project will be operating under a loss even after 10 years.
This leads me to the negative cash on hand requiring the project to borrow money in order to sustain the minimum required balance of $5 million. We can see that this happens to be true in our analysis, we only have the minimum required cash on hand in all scenarios, suggesting that the project did not have enough cash and needed to borrow in order...
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