You decide to purchase a van to transport your hotel guests to and from the airport. This
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Question:
You decide to purchase a van to transport your hotel guests to and from the airport. This is a new service you are adding to your hotel because you have noticed from your STR reports that your competitors are having better occupancy percentages and slightly better ADRs. And after some research, you do have a very comparable product but your current guests have also put in their comment cards that they wish you would provide airport transportation. The cost of the van with the upgrades totals $75,000.You are not charging your guests anything but you have estimated that this new service, you should have an increase in your annual cash flow of $28,000 for the next 5 years. What is the IRR of this van?
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