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 anwer in million, Round your answer to two decimal places. million 114 14% 0.87719 1.64666 2.32163 Present Value of an Annuity of $1 at Compound Interest Periods 8% 99 10% 12% 1 0.92593 0.91743 0.90909 0.90090 0.89286 2 1.78326 1.75911 1.73554 1.71252 1.69005 3 2.57710 2.53129 2.48685 2.44371 2.40183 4 3.31213 3.23972 J16987 3.10245 3,03735 5 3.99271 3.88965 3.79079 3.60478 6 4.022 4.48592 4.23054 4.11141 7 5.20637 5.03295 4.71220 4.56376 5.7466 5.53482 5.33493 5.146124.96764 9 6.24689 5.99525 5.75902 5.537055.32025 10 6.71008 6.41766 6.14452 5.88923 5.65022 2691371 13% 0.38496 1.66810 2.36115 2.97442 3.51723 3.99755 4.42261 4.79677 5.13166 5.42624 3.43300 3.88862 4.250.30 4.63010 4.94637 5.21612 b. Compute the net present value of the new hotel, using the present Value of an annuity of $1 table above. Round to the nearest million dollars. It required, use the minus sign to indicate a negative net present value Net present value of hotel project million C. Does your analysis support construction of the new hotel? carn revenus of $14 milion 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 8% 13% 14% 0.88496 0.87719 1.64665 1.66810 236315 2.97447 2.32153 2.91371 Present Value of an Annuity of si at Compound Interest Periods 10% 11% 12% 1 0.92593 0.91743 0.90909 0.90090 0.89286 2 1.78326 1.75911 1.73554 1.71252 1:69005 3 2.57710 2.53129 2.48685 2.44371 2.40183 4 3.31213 3.23972 3.16987 3.10245 3.03735 5 3.99271 3.88965 3.79079 3.69590 3.60478 6 4.62288 4.48592 4.35526 4.23054 7 5.20637 5.03295 4.86542 4.73220 4.56376 5.74664 5.53482 5.33493 5.14612 4.96764 9 6.24689 5.99525 5.75902 5.53705 5.32625 10 6.71008 6.41766 6.14457 5.88923 5.65022 3.51723 3.43300 3.68862 3.99755 4.42261 4.677 5.13166 5.42624 4.25830 4.63886 4.94632 5.21612 b. Compute the net present value of the new hotel, using the present value of an annuity of $1 table above. Round to the nearest million dollars. If required, use the minus sign to indicate a negative net present value. Net present value of hotel project: million c. Does your analysis support construction of the new hotel? because the net present values