Soap Companies Do Battle

1740 Words Aug 5th, 2010 7 Pages
Assignment No.

Rocky Mountain Mutual: Promoting Fun or Fitness?

A report submitted to

Faculty Member

In partial fulfillment of the requirements of the course

Written Analysis and Communication-I





Rocky Mountain Mutual
Utah, USA


To Zachary Evans, Vice President of Operations

From Joseph Mirola, Claims Manager

Subject: Report on the future of the Fitness Center at Utah headquarters complex.

I am submitting herewith he report on the future of the Fitness Center at Utah headquarters complex.

The options of eliminating or retaining the Fitness Centre have been analysed after taking into consideration various factors. While doing so, economic
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2. Benefit to Employees: This consideration is crucial in assessing the extent of fulfilment of the objective of the FC. 3. Effect on softer factors (Employee morale and Company image) 4. Competitive advantage in recruitment

Following are the alternatives to be considered:

1. Eliminate the FC 2. Retain the FC and institute an organization wide Wellness Program

Evaluation of OPTIONS 1. Eliminate the FC a. Economic Gain to RMM: i. Saving the cost of Maintenance: Amounts to saving $100,000 per year, currently being spent towards maintaining the facility. ii. Saving the cost of new land required for future expansion: After eliminating the FC, RMM can use the space occupied by the center for expansion. This will result in a saving equivalent to the cost of new land which would otherwise have had to be bought for expansion. But, since RMM headquarters are located in a remote suburban area, cost of land nearby is not very high. Therefore, this may not be a substantial saving. iii. Loss of current value of FC resources: Business property is considered to have a life 39 years (See Using Depreciation Tables, 2005). Therefore, the current value (after depreciation) of the property can be estimated to be $923,100. (See Exhibit 2)

In case of closure, the sunk costs will include the costs relating to the following
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