LONG-TERM CAPITAL INVESTMENT For the past six months, the Exeter hotel has been considering introducing coach trips to its guests and local residents. The latest proposal is to add additional coach services to Exeter and Bristol airports. Potential additional cash costs and revenues have been revised to include this additional service. The total proposed cashflows, and are now estimated by the hotel manager to be as follows: Buenos Dias investments have a cost of capital requirement of 11\%, except for those under 150,000 which are assessed at 8%. All proposals are evaluated on a 4-year payback criterion. Financing of proposals under 250,000 is the responsibility of individual hotels. The rate of return on this investment is approximated to be 10%. The hotel manager is also willing to consider alternative investment recommendations. Requirement: Section A of your report - to the Exeter hotel manager and Buenos Dias Operations Director. Make a recommendation on proceeding with the proposal, highlighting any points to support your advice, or are recommended for query / further consideration before a final decision. Discount Rates and Factors