The owners of a discount motel chain are considering building a new motel. Optimistic, pessimistic, and most likely estimates of several key parameters have been obtained from the local builders and the chamber of commerce. These estimates are shown in th table below. The life of the motel is estimated to be 15 years, and MARR is 20%. Parameter Pessimistic Most Likely Optimistic Initial Cost Annual Operating Annual Revenue $10,600,000 $8,575,000 $5,000,000 $395,000 $200,000 $135.000 $1.000.000 $2.300,000 $3,600,000
The owners of a discount motel chain are considering building a new motel. Optimistic, pessimistic, and most likely estimates of several key parameters have been obtained from the local builders and the chamber of commerce. These estimates are shown in th table below. The life of the motel is estimated to be 15 years, and MARR is 20%. Parameter Pessimistic Most Likely Optimistic Initial Cost Annual Operating Annual Revenue $10,600,000 $8,575,000 $5,000,000 $395,000 $200,000 $135.000 $1.000.000 $2.300,000 $3,600,000
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:Part a
Based only on the pessimistic estimates, is the new motel economically attractive?
Please enter the PW used to reach your decision: $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±100.

Transcribed Image Text:The owners of a discount motel chain are considering building a new motel. Optimistic, pessimistic, and most likely estimates of
several key parameters have been obtained from the local builders and the chamber of commerce. These estimates are shown in th
table below. The life of the motel is estimated to be 15 years, and MARR is 20%.
Parameter
Pessimistic
Most Likely Optimistic
Initial Cost
Annual Operating
Annual Revenue
$10,600,000 $8,575,000 $5,000,000
$395,000 $200.000 $135.000
$1,000,000 $2.300,000 $3,600,000
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