Question: need help ASAP Net present value method - annuity for a service company Stay-in-Style (SIS) Hotels Inc. is considering the construction of a new hotel
Net present value method - annuity for a service company Stay-in-Style (SIS) Hotels Inc. is considering the construction of a new hotel for $64 million. The expected life of the hotel is 8 years with no residual value. The hotel is expected to earn revenues of $19 million per year. Total expenses, including depreciation; are expected to be $14 million per year. Stay-In-Style Hotels management has set a minimum acceptable rate of return of 10% a. Determine the equal annual net cash flows from operating the hotel. Enter your answer in million. Round your answer to two decimal places. million Present Value of an Annuitu of \&t at ramnn.... V vi..wa.. b. Compute the net present value of the new hotel, using the present yalue of an annuity of $1 table above. Round to the nearest million dollars. If required, use the minus sign to indicate a negative net present value, Net present value of hotel project: 5 million c. Does your analysis support construction of the new hotel? because the net present value is
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