For question two, assume you can sell the spa at a cap rate of 7 % and discount the sales price at 10%.

WHISTLING WINDS RESORT SPA PROFORMA Year Year Year 2 Year 3 Year 4 Year 5 Spa Occupancy 29% 50% 55% 60% 65% Spa Services Rendered 33,271 58,269 64,096 69,923 75,749 Revenue 1,760,000 $3,167,075 $3,577,022 $4,003,922 $4,447,775 Spa Services 832,000 $1,497,163 $1,690,957 $1,892,763 $2,102,585 Beauty Services Health and Fitness 32,000 57,582 65,035 72,797 80,867 Services Other Revenue 576,000 $1,036,497 $1,170,663 $1,310,375 $1,455,637 Total Spa Revenue 3,200,000 $5,758,317 $6,503,677 $7,279,858 $8,086,863 s 160,000 s 287,915 s 325,183 s 363,992 s 404,343 Cost of Goods Sold Payroll 2,304,000 $3,278,150 $3,559,542 $3,901,888 $4,256,566 s SLI 896,000 1,111,380 1,197,812 $1,297,296 $1,404,492 Operating Expenses Gross Operating Income (160,000 $1,080,872 1,421,140 $1,716,681 $2,021,462 QUESTIONS 1. Based on the projections, how much is this stream of uneven cash flows worth today if the discount rate is 10%? First, compute the present value of each years cash flow individually and add the results. Then, check your answer utilizing the cash flow function. 2. Given the present value calculated in question 1,what will this be worth in 4 years' time