Ivey Publishing
Enigma Escape Rooms Ltd.: Horror-Themed Expansion?
Product Number:
9B17B014
Publication Date:
06/27/2017
Revised Date:
06/20/2017
Length:
11 pages (6 pages of text)
Product Type:
Case (Field)
Source:
Ivey
In 2016, the founder of Enigma Escape Rooms Ltd. (Enigma) was investigating an opportunity to expand his business to a second location. A new location would offer three additional escape rooms, and Enigma would enter the horror-based genre of the market. Enigma had strong demand for its adventure-themed escape rooms during its first year of operations. With escape room popularity at an all-time high and new competitors in or entering the market, the owner wondered if this was the best time to grow his business. He planned to complete a business size-up, assess the competition, and then project the costs and benefits of opening a second location before making a final decision.
Learning Objective:
This case is suitable for an introductory management accounting course at the undergraduate university level. After completing the case, students should be able to
  • perform a business size-up of the company;
  • analyze the opportunity for the company to expand at a second location;
  • assess the cash flows associated with the opportunity and determine which are
    relevant (future, cash, and different) and which are recurring or one-time;
  • perform a differential analysis to evaluate the opportunity in both the high and low scenarios;
  • calculate the return on investment and payback period for the second location; and
  • justify their decision based on their analyses.
    Issues:
    Disciplines:
    Accounting,  Entrepreneurship
    Industries:
    Arts, Entertainment, Sports and Recreation
    Setting:
    Canada, Small, 2016
    Intended Audience:
    Introductory
    Price:
    $4.25 CAD / $4.25 USD Printed Copy
    $3.75 CAD / $3.75 USD Permissions
    $3.75 CAD / $3.75 USD Digital Download
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