(a)
Cash flow:
Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.
Net present value method is the method which is used to compare the initial
The equal annual net cash flows from operating the hotel.
(b)
To calculate: The net present value of the hotel using the present value of an annuity of $1 table found in Appendix A.
(c)
To explain: If the analysis supports the construction of the new Hotel.
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ACCOUNTING,CHAP.1-13
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