stay in style hotels ink is considering the construction of a new hotel for 63 million the expected life of the hotel is six years with no residual value. The hotel is expected to earn revenues of 19 million per year total expenses including depreciation are expected to be 13 million per year stay in styles hotels management has set a minimum acceptable rate of return of 11%.

Net present value method-annulty for a service company Stay-In-Style (SIS) Hotels Inc. Is considering the construction of a new hotel for $63 million. The expected life of the hotel is 6 years with no residual value. The hotel is expected to earn revenues of $19 million per year. Total expenses, including depreciation, are expected to be $13 million per year. Stay-In-Style Hotels' management has set a minimum acceptable rate of return of 11%. a. Determine the equal annual net cash flows from operating the hotel. Enter your answer in million. Round your answer to two decimal places. b. Compute the net present value of the new hotel, usin 1 the present value of an annuity of $1 table above, Round to the nearest million doliars. If requiced, 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 volue is