Capital budgeting Case Study Problem Margaritaville Hotel - Tybee Island , GA Margaritaville Hotel Properties is opening a new beach resort in Tybee Island , GA at a cost of $ 250 Million in year O . The hotel is expected to operate for 20 years and at the end , be sold for approximately $500 Million in year 20. AS an investment the hotel expected to earn $27 Million per year ( including $ 20 Million in year 20 ) . With a discount rate of 8% and reinvestment rate of 8% , analyze the projects feasibility using :" Payback Discounted Payback NPV IRR Profitability Index Q MIRR It turns out , you forgot that the franchise company that licenses the Margaritaville name will require the hotel owners to renovate the hotel property in year 10 . This will result in significant room closures and a significant capital investment . Therefore , cash flows in that year 10 are expected to be - $5 Million . Using MIRR , what did you get for a rate of return