The feasibility of an international centre for commerce and trade

Abstract

Despite the upsurge in the use of Internet, exhibitions maintain their attractiveness in the way people do business. The increasing awareness of globalisation and free trade has led to a continuous effort in trying to promote our island as a Mediterranean hub for trade. However, no adequate contemporary exhibition and conference facilities, capable of competing with those offered by our neighbouring countries, exist on the island. This study analyses the financial feasibility or otherwise of setting up an International Centre of Commerce and Trade, where a business centre would be created. It involves an estimation of the capital outlay required to set up the project, together with detailed forecasts regarding revenue and expenditure for a twenty-five year period. The Profit and Loss Accounts and the Cash Flow Statements, depict the projected financial situation of the project. These budgets were used as a basis for an overall evaluation of the project. This evaluation has been carried out through an application of Discounted Cash Flow and traditional financial techniques. An exercise in sensitivity analysis highlighted which sensitive variables management has to consider and which should be given particular attention in its decisions. The study also includes a number of recommendations and areas for further research linked to this study.