Section B

After one week, Whistler$552,$ has made a strategic decision to invest in a new Heating, Ventilation, and Air Conditioning $($HVAC$)$ system. The system features dual$-$zone climate control, an advanced High$-$Efficiency Particulate Air $($HEPA$)$ filtration system, smart thermostat integration, and quiet operation technology, aimed at enhancing the guest experience and aligning with the hotel's wellness ethos. This investment is also anticipated to reduce energy costs and add value to the property.

The hotel has incurred various costs associated with the purchase and implementation of the HVAC system. These costs include a purchase price of $$120,000,$ installation for $$20,000,$ staff training for $$5,000,$ specialized maintenance tools for $$3,000,$ delivery costs of $$2,000,$ an electrical system upgrade for $$10,000,$ promotional materials for $$1,000,$ an extended warranty for $$4,000,$ and a government compliance fee for $$500.$ The HVAC system is expected to have a useful life of $15$ years and a residual value of $$10,000$ at the end of its life.

Please find below the extracts from the minutes of our most recent meeting:

Trainee Accountant: "Jude, in light of our current liquidity challenges and the total investment of $$161,500$ for the new HVAC system, we need to consider our financing options carefully, especially given our recent drop in profits."

Jude: "Are you sure about this estimate? To clarify the financing, one of our existing $20\%$ owners has expressed interest in either purchasing an additional $10\%$ ownership for $$200,000$ or lending us the money at an $8\%$ interest rate. We need to explore the pros and cons of accepting additional equity versus taking on debt. Additionally, how should we reflect this in our financial statements, and what would be the most suitable depreciation method to apply"

Trainee Accountant: "Jude, when considering depreciation methods for the HV AC system, there's one option that might sync well with the pattern of benefits we're expecting from the upgrade."

this system brings. What narrative should we craft to elevate our market presence and entice a broader clientele? Reflect on the messaging that aligns with our commitment to wellness.

Additionally, consider the implications this advancement may have on our team composition. What adjustments might we foresee in terms of staffing needs? Think about the specialized skills and additional support that might become necessary in the immediate aftermath of the installation, and how this need may change. Moreover, could this technological advancement streamline our operations to a degree that influences our long$-$term staffing blueprint?

To further enhance the hotel's reputation, Jude decided to implement an innovative feedback system. Guests were encouraged to leave detailed reviews about their stay, with the promise of a substantial discount on their next visit. The system was a hit, with numerous guests providing glowing testimonials. However, Jude soon realized that many reviews exaggerated the quality of their stay, influenced by the discount incentive. Despite the boost in business, some staff members felt uneasy about this practice, questioning the integrity of these reviews and the honesty of the hotel's image. The situation became more complicated when a renowned travel blogger, planning to feature 'Whistler$552\text{'},$ was also offered this discount in exchange for a positive review.

Jude is seeking your consultancy expertise to provide a concise business memo for Whistler$552,$ our boutique wellness hotel. Your task involves advising on financial reporting, system cost capitalization, depreciation strategies, liquidity management, ethics and their impact on profitability. We expect data$-$driven recommendations that address these critical financial and operational concerns within a timely manner. Your guidance is instrumental in helping us make informed decisions and enhance our financial performance.