Thank you for checking. Net Present Value Method-Annuity for a Service CompanyWelcome Inn Hotels is considering the construction of a new hotel for $63 million. The expected life of the hotel is 8 years with no residual value. The hotel is expected toearn revenues of $19 million per year. Total expenses, including depreciation, are expected to be $13 million per year. Welcome Inn management has set a minimumacceptable rate of return of 11%. Assume straight-line depreciation.a. Determine the equal annual net cash flows from operating the hotel. Round to the nearest million dollars.$millionPresent Value of an Annuity of $1 at Compound InterestPeriods8%9%10%11%12%13%14%10.925930.917430.909090.900900.892860.884960.877191.783261.759111.735541.712521.690051.668101.646662.577102.531292.486852.443712.401832.361152.3216343.312133.239723.169873.102453.037352.974472.913713.992713.889653.790793.695903.604783.517233.433086.4.622884.485924.355264.230544.111413.997553.8886775.206375.032954.868424.712204.563764.422614.2883085.746645.534825.334935.146124.967644.796774.638866.246895.995255.759025.537055.328255.131664.94637106.710086.417666.144575.889235.650225.426245.21612b. Calculate the net present value of the new hotel using the present value of an annuity of $1 table above. Round to the nearest million dollars. If required, use theminus sign to indicate a negative net present value.Net present value of hotel project: $million

The question is based on the concept of financial management.

Welcome Inn Hotels is considering the construction of a new hotel for $63 million. The expected life of the hotel is 8 years with no residual value. The hotel is expected to earn revenues of $19 million per year. Total expenses, including depreciation, are expected to be $13 million per year. Welcome Inn management has set a minimum acceptable rate of return of 11%. Assume straight-line depreciation. a. Determine the equal annual net cash flows from operating the hotel. Round to the nearest million dollars. million Present Value of an Annuity of $1 at Compound Interest Periods 8% 9% 10% 11% 12% 13% 14% 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 2 1.78326 1.75911 1.73554 1.71252 1.69005 1.66810 1.64666 3 2.57710 2.53129 2.48685 2.44371 2.40183 2.36115 2.32163