the IRR compare with the compan Serial Case C12-63 Calculate payback period and Objective 2) after hotel renovation (Learning This case is a continuation of the Caes in Chapter 1. Refer to the introductory story in Chapter 1 (see page ground. (The components of the Caesars serial case can be complete owen ren Caesars Palace Las Vegas made headlines when it undertook a $75 million ras last upda mid-September 2015, the hotel closed its then-named Roman Tower, t totion in 2001, and started a major renovation of the 567 rooms housed in that 1, 2016, the newly renamed Julius Tower reopened, replacing the Romar2 quest rooms to renovating the existing rooms and suites in the former Roman Tower. added to the Roman Tower. serialcasethback nt Corporation serial case that began ge 43) for a in any order tion. In 20 guest rooms were is $27. Also assume that $25,000,000. The towers in Caesars suites in t Assume that the annual fixed operating costs for the Julius Towe and that the variable cost per hotel room night after the renovation maintenance costs in the seventh year, after the renovation, w costs, twelve years after the renovation, are estimated at $25 Palace Las Vegas are generally renovated once every fifteen years. Assume tower's room rate is $149 per night, and 91.2% occupancy is expected on average. r will be $2,390,000 will be $17,000,000; maintenance Questions 1. In number of years, what is the payback period of the renovation? Ignore the mainte- back calculation nance costs in the seventh and twelfth years for the purpose of the pay 2. What is the net present value (NPV) of this investment? Assurme an interest rate of 10%. 3. What qualitative factors did Caesars's management likely consider when making the deci- sion to renovate the hotel