Owners of an economy motel chain are considering building a new 200 unit motel. The present worth cost of building the motel is S8M; the firm estimates that furnishing the motel will cost an additional $800K and will require replacement every 5 years. Annual operating and maintenance costs for the facility are estimated $800K. The average rate for a unit is expected to be $60/day. A 15-year planning horizon is used by the firm in evaluating a new venture of this type. The terminal salvage value of the building is expected to be 15% of the original building cost is anticipated. Furnishings do not salvage value at the end of their five-year life. Assuming daily occupancy percentages of 50%, 60%, 70%, 80% for years 1 through 4 respectively and 90% for the fifth and each remaining year, MARR (interest rate) of 12%, 365 operating days/ year, and ignoring the cost of the land, should the motel be built? Base your decision on: 4. 2 A. Present worth