In order to NPV is zero then Present value of Cash out flow is equal to present value of Cash inflow.
Here, expected rate return is not mentioned hence ignored.
Total cash outflows are $ 5000000
for NPV zero, cash inflows are also $5000000
So the value of the hotel should the city be awarded the franonchise + $ 5millions
Here is the ORIGINAL data of the Sport Hotel project: 1. Projected outflows First year (Purchase...
Here is the ORIGINAL data of the Sporthotel problom: 1. Projected outflows First year (Purchase Right, Land, and Permits) Second Year (Construct building shel Third Year: (Finish interior and furnishings) TOTAL $1,000,000 $2,000,000 $5,000,000 2. Projected inflows If the franchise is granted hotelwill be worth If the franchise is denied hotelwill be worth $8,000,000 when it opened $2,000,000 when it opened. The probability of the city being awarded the franchise is 50%. the hotel, should the city be awarded the...
Here is the ORIGINAL data of the Sporthotel problem 1. Projected outflows First year (Purchase Right, Land, and Permits) Second Year (Construct building shell Third Year: (Finish interior and furnishings) TOTAL $1,000,000 $2,000,000 $5,000,000 2. Projected inflows If the franchise is granted hotelwill be worth: If the franchise is denied hotelwill be worth $8,000,000 when it opened $2,000,000 when it opened. The probability of the city being awarded the franchise is 50% ssume that over thin s the same as...
Sporthotel problem: 1. Projected outflows First year (Purchase Right, Land, and Permits) $1,000,000 Second Year (Construct building shell $2,000,000 Third Year: (Finish interior and furnishings) $2,000,000 TOTAL $5,000,000 2. Projected inflows If the franchise is granted hotel will be worth: $8,000,000 when it opened If the franchise is denied hotel will be worth: $2,000,000 when it opened. The probability of the city being awarded the franchise is 50%. Assume that everything is the same as in that problem except for...
This question is a variant of the Sport Hotel example that was presented in class, in the class notes, and in the Real Option chapter. The change to consider is this: suppose that the value of the hotel is one of two values: $9.4 million if the city is successful in obtaining the franchise (and not $8 million as in the original problem) or $3.7 if the city is not successful in obtaining the franchise (and not $2 million as...
Comprehensive Income Tax Course: Module 1 4. Randy turned 16 last year and had his first summer job. Even though his parents are claiming him as a dependent he wants to file a return in order to get his refund. He receives his W-2 and decides he can do his own return using form 1040-EZ. Which of the following information is not found on a Form W-2? a) The taxpayer’s Social Security number b) The taxpayer’s wages, tips and other...
A. Issues [1] In addition to damages for one year's notice period, can a trial judge award significant damages for the mere fact of an employee's dismissal, or for the stigma that that dismissal brings? Or for the employer thereafter competing with the ex-employee for the clients, before the ex-employee has got a new job? B. Basic Facts [2] This is an appeal from 2009 ABQB 591 (CanLII), 473 A.R. 254. [3] Usually a judgment recites facts before law. But...