Exhibit 8: Assumptions Concerning the Hanover Inn Solar Thermal RoofingProject

35,000 square foot roof

Cost of conventional roof: $350,000

Life of twenty years

Depreciated for tax purposes using straight line over twenty years

Cost of solar roof: $700,000

Life of forty years

DepreciatedusingfiveyearMACRS(withthehalf-yearconvention,thedepreciationtakes place over a six year period)

First year federal investment tax credit: 30 percent of total solar roof cost

Depreciable basis: total solar roof cost minus 50 percent of initial tax credit

Tax rate: 35 percent

Yearly reduction in heating requirements for 35,000 square foot roof: 1,925 million BTU

Current cost per million BTU: $13.30

Mortgage interest rate if initial roof cost is financed: 6 percent (Mortgage would be

amortized in equal payments over the life of the mortgage).

Pasttenyearenergyinflationrate:5percent/year

Pasttenyearconsumerinflationrate:2.5percent

Department of Energy projected annual fuel price increases: Real interest rate 3percent and 0.9 percent inflation

Risk free rate: 1.85 percent

Cost of debt for Hanover: 7.5 percent

No yearly maintenance costs for either solar or conventional roofs

Cashflowsforthesolarroofincludedinflowsconsistingoftheenergysavings,invest-ment tax credit for the solar option, and the depreciation tax shield and outflows ofthe cost of the roof.

After hearing American Solars sales proposal, Hanover Inns decided to hire your group as the consultants to conduct a set of capital budgeting analysis. The goal is to understand the costs and benefits of different plans and help them make an optimal decision. Your group decides to set up models to compute the incremental cash flows and NPV of the following scenarios:

1. conventional roof, no financing, no energy inflation

This means the hotel pays for the new roofs out of its regular capital budget without taking on any special financing.

Consider the incremental cash flows from the initial investment, and tax shield from depreciation expenses

Assume straight-line depreciation

Assume a WACC of 9%