Net Present Value Method$-$Annuity for a Service Company

depreciation, are expected to be $$14$ million per year. Welcome Inn management has set a minimum acceptable rate of return of $10\%.$ Assume straight$-$line depreciation.

a$.$ Determine the equal annual net cash flows from operating the hotel. Round to the nearest million dollars.

$$

million

Present Value of an Annuity of $$1$ at Compound Interest

Net present value of hotel project: $

million

c$.$ Does your analysis support the purchase of the new hotel?

$,$ because the net present value is