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5. Your bank has been asked to evaluate the following project for a key client - The Craighouse Hotel Chain. The firm has supplied the

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5. Your bank has been asked to evaluate the following project for a key client - The Craighouse Hotel Chain. The firm has supplied the following information summarised in the table below to request a loan for a new hotel in Edinburgh. The model selected for the analysis was a RADR model. In addition, the initial investment in the project is 450,000. The firm's cost of capital is 12%, however projects in this risk class have a 14% required rate of return. The risk-free rate is 8%.

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