Investments
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Fixed depreciation costs
There is an amount of depreciation costs of existing assets, set at € 525.187 fixed costs which you can find in the operating review and which you cannot influence. This part of the fixed costs is called depreciation costs of existing assets. You do not have to bother about this amount, though it is around 34,64% of your total of costs as you have a rather big assets. As these costs are fixed they are not influenced by the occupancy rate nor by your decisions and so will stay the same all over the years.
New investments
However, if you do new investments, you will get a cost group Extra depreciation on your operating review.
In you explanations you should calculate how you want to do this.
If you make an investment of € 260.000 in year one and want to depreciate it in 6 years, this means € 40.000 extra depreciation costs in year 1 (and the next five consecutive years). In year 2 you decide upon another investment of € 80.000 to be depreciated in 10 years. So additional costs on depreciating will be for this investment € 8.000 together with the extra depreciation costs from the investment in year 1 (€ 40.000) you should fill out € 48.000 extra depreciation costs in year 2. If there is no additional investment in year 3, the costs for depreciation will stay € 48.000 in year 3 and the same for year 4.
You can have any extra investment costs as long as the total extra costs per year do not exceed € 250.000 per year as additional (see the page decisions). Remember there is a history on the hotel. You carefully have to explain the amount.
How big should the investment be?
Of course first of all you have to have a clear plan: what do you exactly want to do? Does this fit-in with your strategy?
Secondly realize that investments bring upon costs (the depreciation as explained above), so will you earn this back?
But you do want to renovate the sauna, what does this cost? Well, check the internet, look around in study material or look at cases. A educated guess is required, so estimate the costs yourself, based on any comparable prices you have found. Try to be realistic, but as in reality 'how much does it cost' depend on so many things and is not easy to answer. A good starting point is estimating hotel costs. Do not focus to much on details!
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