V 1.287 Q4) Commercial real estate tycoon Onald Rump is deciding between two types of...
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V 1.287 Q4) Commercial real estate tycoon Onald Rump is deciding between two types of hotels to build on land he just purchased. His first option is to build a small bed and breakfast that will cost $400,000 to build this year and will generate cash inflows of $73,000 every year for 30 years. His second option is to build a massive 10 story hotel costing $10 million to build and will generate $1,368,000 every year for 30 years. If his cost of financing is 79)which type of hotel should he build? What is the IRR of the better project? Bed & Breakfast; IRR = 18.26% B & B - 400,000 B) Bed & Breakfast; IRR = 13.16% C) Massive 10 Story: IRR = 13.36% Dy Bed & Breakfast; IRR = 18.13% Massive 10 Story; IRR = 24.36% +73,000 30 yrs = 118,127 % A - 10,000,000 horel
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