Assume you are Claire and are trying to determine if the Mount Hope shopping mall is a good investment of your $6.5 million inheritance, using a 20-year period. Assume operation of the facility begins in year 2 and the equity is utilized in year 1.

Determine the:

• Gross annual revenue
• Annual Maintenance Costs
• Net Annual Revenue
• Estimated Annual Debt Service
• Estimated Annual Profit
• Net Present Value of Claire’s investment, if the discount rate = 9%
• Internal Rate of Return for the project investment

Prepare a memo summarizing your findings from above and make a firm recommendation as to whether the project is a sound investment.