Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can someone help me as to why i got the wrong answer for letter A? Amenity Hotels Inc. is considering the construction of a new

can someone help me as to why i got the wrong answer for letter A? image text in transcribed
Amenity Hotels Inc. is considering the construction of a new hotel for $63 lion. The edhe disa here. The store og ind depreciation, are expected to be $1 million per year Amenity Hotel management has a state ofretum of a. Determine the equal annual cash flows from eating the hotel. Enter your own www to two decalces BX million Present Value of an Annuity of $1 at Compound Interest Periods 9 10 13 149 1 0.92593 0.91743 0.90909 0.00090 0.1925 0.0496 087719 2 1.78326 1.75911 1.73554 1.71252 1.69005 1.66010 1.64666 2.57710 2.53129 2.4685 2.443717.40183 25115 2.32163 4 3.31213 3.23972 3.16987 3.10245 303735 2.97447 2.9137 5 3.90273 3.88965 3.79070 3.69900 3.604783.51723 140 6 4,0226 448502 4.35526 423054 4.11141 3.99755 3 7 5.20037 5.03295 4.80042 4.71220 4.56376 4.42261 428830 5.74664 5.53482 5.30493 5.14612 4.96764 4.79677 4.636 9 6,24659 5.99525 5.759025.53705 5.32825 5.13166 494637 10 6.71008 6,417666.14457 5.80923 5.65022 5.42624 5.21612 b. Compute the net present value of the new hotel, using the present value of an annuity of $1 table above. Round to the nearest million dollars. If required, use them Net present value of hotel project: million c. Does your analysis support construction of the new hotel? Yes because the net present value is positive WOW Subtract the total expenses less the depreciation expense from the annual revenue b. Multiply the annual net cash flow from a) by the present value of an annual factor for a periods 115(eler Appendix is the best. Subtract the c. Which is more favorable-a positive e present value or a negative et presente

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp, Loreen Knapp

4th Edition

0324048610, 9780324048612

More Books

Students also viewed these Accounting questions