Here is the ORIGINAL data of the Sport hotel problem: 1. Projected outflows First year (Purchase Right,
Question:
Here is the ORIGINAL data of the Sport hotel problem:
1. Projected outflows First year (Purchase Right, Land, and Permits) $1,000,000 Second Year (Construct building shell $2,000,000 Third Year: (Finish interior and furnishings) $2,000,000 TOTAL $5,000,000
2. Projected inflows If the franchise is granted hotel will be worth: $8,000,000 when it opened If the franchise is denied hotel will be worth: $2,000,000 when it opened. The probability of the city being awarded the franchise is 50%.
Assume that everything is the same in the problem except for one thing: the first year projected outflow is not $1 million but instead is $1.1 million. Given this change, The project’s NPV = _______ million
Financial Accounting
ISBN: 978-0134127620
11th edition
Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz