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Net Present Value Method - Annuity Take a Load Off Hotels is considering the construction of a new hotel for $ 7 6 million. The

Net Present Value Method-Annuity
Take a Load Off Hotels is considering the construction of a new hotel for $76 million. The expected life of the hotel is 19 years with no residual value. The hotel is expected to
earn revenues of $12.6 million per year. Total expenses, including straight-line depreciation, are expected to be $6 million per year. Take a Load Off's management has set a
minimum acceptable rate of return of 6%.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
X
Open spreadsheet
a. Determine the equal annual net cash flows from operating the hotel. Round your answer to one decimal place.
$, million
b. Calculate the net present value of the new hotel at 6% for 19 periods. Do not round intermediate calculations. Round to the nearest million dollars. If the net
present value is negative, enter the amount using a minus sign.
$
million
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