A hotel is being constructed to cater for renewed demand post-covid Construction Cost = RM 20...
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A hotel is being constructed to cater for renewed demand post-covid Construction Cost = RM 20 million Allocation of Fixed Costs from HQ = RM 5 million Payment Made to Consultants = RM 2 million The following cost and revenue relations will be affected: Year 1 Year 2 5000 8000 Revenue based on Current Pricing Cost based on Current Pricing: Materials Human Costs Overheads Marketing and Promo 500 800 100 500 Price Level Changes in Cost Estimates are: Revenue = 5% Materials = 8% Human Costs=N/A Overheads = 5% Marketing and Promo = N/A 960 900 100 640 Effective Tax Rate After Capital Allowance = 15% Nominal Cost of Capital (Required Return) = 20% Required: Calculate the NPV, IRR, PI, and Payback Period. Year 3 15000 1800 1100 100 750 Year 4 Year 5 18000 21000 2700 1200 100 900 3150 1500 100 1050 A hotel is being constructed to cater for renewed demand post-covid Construction Cost = RM 20 million Allocation of Fixed Costs from HQ = RM 5 million Payment Made to Consultants = RM 2 million The following cost and revenue relations will be affected: Year 1 Year 2 5000 8000 Revenue based on Current Pricing Cost based on Current Pricing: Materials Human Costs Overheads Marketing and Promo 500 800 100 500 Price Level Changes in Cost Estimates are: Revenue = 5% Materials = 8% Human Costs=N/A Overheads = 5% Marketing and Promo = N/A 960 900 100 640 Effective Tax Rate After Capital Allowance = 15% Nominal Cost of Capital (Required Return) = 20% Required: Calculate the NPV, IRR, PI, and Payback Period. Year 3 15000 1800 1100 100 750 Year 4 Year 5 18000 21000 2700 1200 100 900 3150 1500 100 1050
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To calculate the NPV IRR PI and Payback Period we need to first calculate the cash flows for each ye... View the full answer
Related Book For
Fundamentals of Database Systems
ISBN: 978-0136086208
6th edition
Authors: Ramez Elmasri, Shamkant Navathe
Posted Date:
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