Serial Case C12-63 Calculate payback period and NPV after hotel renovation This case is a continuation of the Caesars Entertainment Corporation serial case th in Chapter 1. Refer to the introductory story in Chapter 1 (see page 43) for additinat begar ground. (The components of the Caesars serial case can be completed in any orcde Caesars Palace Las Vegas made headlines when it undertook a $75 million renow mid-September 2015, the hotel closed its then-named Roman Tower, which was la in 2001, and started a major renovation of the 567 rooms housed in that towers updat 1, 2016, the newly renamed Julius Tower reopened, replacing the Roman Toweranuar to renovating the existing rooms and suites in the former Roman Tower, 20 guest Objective 2) tional b On Jte n addition uest rooms were Assume that the annual fixed operating costs for the Julius Tower will be $2 3 and that the variable cost per hotel room night after the renovation is $27. Alsoasu maintenance costs in the seventh year, after the renovation, will be $17,000,000 costs, twelve years after the renovation, are estimated at $25,000,000. The tow Palace Las Vegas are generally renovated once every fifteen years. Assume the ren tower's room rate is $149 per night, and 91.2% occupancy is expected on average Questions added to the Roman Tower nance costs in the seventh and twelfth years for the purpose of the payback cal 2. What is the net present value (NPV) of this investment? Assume an interest rat 3. What qualitative factors did Caesars's management likely consider when m 1. In number of years, what is the payback period of the renovation? Ignore the culat of 10% aking the deci sion to renovate the hotel