Prestige Telephone (Case #2) Due at the beginning of the first class after Thanksgiving break (12/1 or 12/2). Target length is two pages of discussion supplemented by tables (as needed). YOU MUST TYPE THIS – DO NOT HAND IN A HANDWRITTEN PROJECT! Modified / revised case questions (use these in conjunction with the questions in the case). 1. Read the case question as presented (page 3 of the case). Alternative interpretations for this question are, “Does Prestige Data Services cost Prestige
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Prestige Telephone Company case study In 1999, the Government encouraged public utilities to seek new sources of revenues and profits to reduce the need for rate increases to consumers of telephone services. Prestige Telephone Co. (PTC) considered that a centralised data provider service could be a profitable use of excess hours from existing infrastructure. Prestige Data Services (PDS) performed data processing for the telephone company and sold computer services to other companies and
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results of operations of Prestige Data Service. Is the subsidiary really a problem to Prestige Telephone Company? Consider carefully the differences between reported costs and cost relevant for decisions that Daniel Rowe is considering. 1.The prestige Data Services grew from the needs of the Prestige Telephone Company to meet their needs of data handling at the time but the problem now is that the company is still operating at a loss. But is that a problem for the parent company? We do not think so,
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Introduction * Pestige Data Services (PDS) was a subsidiary of PrestigeTelephone (PT) Company.PDS -Data processing for the telephone companies & soldcomputer services to other companies. * Yet to experience profit. * Manager -More time required for business to become profitable. * President -Reduce the drain in company resources. Objectives * Analyze the results of operations. * Understand the economics of a business. * Forecast the potential change in income
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Case Study – Prestige Telephone Co. Company Profile Prestige Data Services is a subsidiary of Prestige Telephone Company, a public utility. They are a computer data service company that does data processing for the parent company in order to sell computer services. The company was opened in order to bring in additional revenue in order to offset increases in telephone rate increases. Throughout the three years of being in operation the subsidiary has been unprofitable. Case Question #1 Assuming
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Q1 In the first quarter of 2003, Prestige Data Services (PDS), a strategic subsidiary of Prestige Telephone, is showing a net loss of $75K. Their monthly revenues for the quarter have varied from $189K to $212K and their expenses have remained relatively flat around $222K each month. Table 1: High Level Q1 2003 Financials It might appear that the data subsidiary is continuing to lose money and should be considered as a candidate for elimination. However, that is NOT the case. The financials
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Prestige Telephone Company Case Analysis: Prestige Telephone Company Liam Hennessy, Xinyi Zhang, Yuan Chai, and Anthony Saba 1. Reasons for Continuing Losses Prestige Data Services’ main problem is that they have too many available hours that are not generating any revenue. In the first quarter of 2003, they have an average of 176 available hours per month of available hours. Its operations exact a huge amount of fixed costs to cover. If they could find more commercial customers for the available
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Prentice Hall, 2006 2.Harvard Business School Case 9-198-117 Rev. September 17, 1998, “Classic Pen Company: Developing an ABC Model” 3.Harvard Business School Case 9-197-097 Rev. June 11, 2003, “Prestige Telephone Company” 4.Harvard Business School Case 0-100-066 June 7, 2000, “Hollydazzle.com” 5.Calculator 6.Laptop computer Grading Homework Class participation Classic Pen case Prestige Telephone case
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1. Prestige Data Services is quite a problem to Prestige Telephone.This is because as it can be seen from the data, the Prestige Data Services is spending more than it is earning as it can be derived from the difference between total expenditure and total revenue. Further, the period that it had been allocated to prove profitable had already been exceeded and no worthy results were available which means even if the subsidiary was added more time little progress could be made. This is supported by
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CASE BACKGROUND • Prestige Telephone Company (PTC) is the parent company of Prestige Data Services (PDS) • PDS provides data services to its parent company as well as other companies willing to hire its services • It is wholly owned by PTC, but runs as a separate business entity, so each pays the other for services received • It was conceptualized in 1994, and started operations in 1995 • Daniel Rowe, president of PTC, was the one who pitched PDS, and believes it could
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