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Net Present Value Method-Annuity for a Service Company Amenity Hotels Inc. is considering the construction of a new hotel for $48 million. The expected life
Net Present Value Method-Annuity for a Service Company Amenity Hotels Inc. is considering the construction of a new hotel for $48 million. The expected life of the hotel is 8 years with no residual value. The hotel is expected to earn revenues of $14 million per year. Total expenses, including depreciation, are expected to be $10 million per year. Amenity Hotels' management has set a minimum acceptable rate of return of 12%. a. Determine the equal annual net cash flows from operating the hotel. Enter your answer in million. Round your answer to two decimal places. s million
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