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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 MethodAnnuity
Take a Load Off Hotels is considering the construction of a new hotel for $ million. The expected life of the hotel is years with no residual value. The hotel is expected to
earn revenues of $ million per year. Total expenses, including straightline depreciation, are expected to be $ million per year. Take a Load Off's management has set a
minimum acceptable rate of return of
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 for 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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