You are part of a group of entrepreneurs who are considering purchasing and refurbishing an older hotel called the point of View Suites in Louisbourg, Cape Breton. Based on the risk of the investment, you have assigned a discount rate of 16% to all future cash flows. You have paid an architect $80,000 to provide a report of necessary renovations. The cost of the hotel is $1,490,000, including the cost of necessary renovations to modernize the facilities. The useful life of the building (once renovated) is estimated to be 25 years. The architect estimates that the property could be sold at the end of its useful life for $175,000. Annual revenues from room rentals and food/bar services are estimated to be $1,100,000 with annual costs of $850,000. For simplicity, assume that these revenues and costs occur at the end of each year and ignore taxes and depreciation. Part A: Are there any sunk costs in this project? If so, what are they? Part B: Using a net present value (NPV) analysis, determine whether you should proceed with this project. Show all your work. Part C: Assume the IRR of this project is 16.45%. The architect mentions that a similar hotel, The Blue Goose Inn, is for sale in the same area with a NPV of $180,000 and an IRR of 12.50%. Assuming you only had enough capital to purchase and renovate one hotel; which hotel would you choose to purchase and why