The Historic Ashbrook Hotel, is located on 120 acres in the beautiful hills of North Carolina. The hotel's management is looking to increase foot-traffic by adding some new amenities. The big project that management is considering is to either build a theatre or spa in some unused space on the Basement 1 floor. Theatre Spa Initial Cost $ 250,000 $ 327,000 Annual cash inflows $ 60,000 $ 80,000 Annual cash outflows $ 30,000 $ 26,000 Salvage value $ $ 8,000 Estimated useful life 15 years 10 years Management's hurdle rate for its investments is 10%. The company uses the straight-line method of depreciation. Help management decide which capital project should be selected by computing the net present value for both projects. 1 Which project would you recommend management to go ahead with? Why? Are there any other factors that should be considered