Net Present Value Method-Annuity for a Service Company Amenity Hotels Inc. is considering the construction of a new hotel for $81 million. The expected life of the hotel is 7 years with no residual value. The ho is expected to earn revenues of $22 million per year. Total expenses, including depreciation, are expected to be $16 million per year. Amenity Hotels management has set a minimum acceptable rate of return of 9%. a. Determine the equal annual net cash flows from operating the hotel. Enter your answer in million Round your answer to two decimal places. million Present Value of an Annuity of $1 at Compound Interest Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 2 1.78326 1.75911 1.73554 1.71252 1.69005 1.66810 1.64666 3 2.53129 2.48685 2.44371 2.40183 2.36115 2.57710 3.31213 2.32163 2.91371 4 3.23972 3.16987 3.10245 3.03735 2.97447 5 3.99271 3.88965 3.79079 3.69590 3.60478 3.43308 3.51723 3.99755 6 4.62288 4.48592 4.35526 4.23054 4.11141 3.88867 7 4.86842 4.71220 4.56376 4.42261 4.28830 5.20637 5,03295 5.74664 5.53482 8 5,14612 4.96764 4.79677 4.63886 5.33493 5.75902 9 5.99525 5.53705 4.94637 6.24689 6.71008 5.32825 5.65022 5.13166 5.42624 10 6.41766 6.14457 5.68923 5.21512 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 eBook Show Me How COUNCIL million Print Item opernicom Wowo-Uca UCC Present Value of an Annuity of $1 at Compound Interest Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 2 1.78326 1.75911 1.73554 1.69005 1.66810 1.64666 1.71252 2.44371 3 2.57710 2.53129 2.48685 2.40183 2.36115 2.32163 4 3.31213 3.16987 3.10245 3.03735 2.97447 2.91371 3.23972 3.88965 5 3.99271 3.79079 3.69590 3.60478 3.51723 3.43308 6 4.62288 4.48592 4.35526 4.23054 4.11141 3.99755 3.88867 7 5.20637 5.03295 4.86842 4.71220 4.56376 4.42261 4.28830 8 5.74664 5.53482 5.14612 4.96754 4.79677 4.63886 9 6.24689 5.99525 5.33493 5.75902 6.14457 5.53705 5.32825 5.13166 4.94637 5,650225442624 5.21612 10 6.71008 6.41766 5.88923 b. Compute the net present value of the new hotel, using the present value of an annulty of $1 table above. Round to the nearest million dollars. I 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 value is