Consider again the information concerning the Hospitality Investment, Inc., project in Problem 9.10 in Chapter 9.

Reguired:

1. Calculate the payback period for all three options.

2. On the same graph, plot the NPV profiles of the motel option and the restaurant option.

3. Determine the IRR of all three options (building the motel, building the restaurant, and selling the land).

4. State whether these project valuation criteria lead to the same project rank- ing decisions as NPV and explain why or why not.

9. Identify the best project option and explain why it is the best option.