II. Based on the case, provide the following information in your final output to the questions below:

1) Please assess the economic benefits associated with each of the capital project. What is the initial outlay? What are the incremental cash flows (revenues, costs, and revenue reductions (e.g, patronage factor) over the life of the projects? What is an appropriate discount rate to use for discounting the cash flows of the projects?

2) Rank the projects using four measures of investment attractiveness:

a. IRR

b. NPV

c. Payback and Discounted Payback

d. and Average return on investment.

Do all measures rank the projects identically? Why or why not? Which measure is the best? Are the projects comparable given that they have unequal lives?

3) How sensitive is your ranking to changes in the input value drivers? What other key value drivers would affect the attractiveness of the projects? Please estimate the sensitivity of your result to a change in any of the key value drivers.

4) Based on your analysis, which project do you recommend the Hotel to undertake?

III. In your final output, create four tabs in the Excel:

a) Tab 1: Breakdown Analysis of the Lease Option (30% of total grade)

b) Tab 2: Breakdown Analysis of the Build Option (30% of total grade)

c) Tab 3: Sensitivity Analysis (30% of total grade)

d) Tab 4: Summary write up on your recommendation for the Hotel and any justifications/comments for the key drivers used in the analysis. (10% of total grade)