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Hilton is thinking about building a new hotel in New York City. The IRR of the hotel would be 8%, and the NPV would be
Hilton is thinking about building a new hotel in New York City. The IRR of the hotel would be 8%, and the NPV would be -3.2 million dollars. Hilton's cost of capital is 10%. Select the answer that explains what Hilton should do and why:
| Open the new hotel because the NPV is positive | ||
| Open the new hotel because the IRR is greater than the cost of capital | ||
| Do not open the new hotel because the NPV is negative | ||
| Do not open the new hotel because the cost of capital is greater than the IRR | ||
| None of the above |
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