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Business, 05.05.2020 22:36 Alex4530

You have noticed an ad listing a motel for sale. After doing some research, you estimate that the 20 rooms can be rented for $60 per day with an occupancy rate of 80% per year. You have found a management company that will run the motel and take care of daily housekeeping for 10% of the rents. You estimate that repairs and maintenance costs will be $3,000 per month and that other cash expenses will be $4,000 per month. You plan to sell the motel at the end of the third year for $500,000. How much are annual net cash flows? What would be the annual net cash flows for the motel? A. $ 231,360 B. none of the listed choices C. $ 262,336 D. $ 58,948 E. $ 119,040

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