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***PLZ ANSWER BOTH Herculean Fitness would like to purchase a new set of weight machines for their gym. The new machines would cost $700,000 today.
***PLZ ANSWER BOTH
Herculean Fitness would like to purchase a new set of weight machines for their gym. The new machines would cost $700,000 today. If they purchase the new machines, Herculean Fitness would generate new business and increase their cash flows by $190,000 per year. What is the payback period of purchasing the new machines?
Hilton is thinking about building a new hotel in New York City. The IRR of the hotel would be 8%, and the NPV would be -3.2 million dollars. Hilton's cost of capital is 10%. Select the answer that explains what Hilton should do and why:
Open the new hotel because the NPV is positive
Open the new hotel because the IRR is greater than the cost of capital
Do not open the new hotel because the NPV is negative
Do not open the new hotel because the cost of capital is greater than the IRR
None of the above
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