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Most lodge operators will only deal with the existing worth of the Houses, or even the NPV. They don't typically take into account the long-expression upkeep costs, which has an enormous effect on the prolonged-phrase maintenance cost of the resort.

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Use of returns could be either arithmetic common or geometric regular but geometric ordinary is more appropriate then arithmetic average as arithmetic regular is reflecting straightforward return more than a time period on Preliminary financial commitment, irrespective of the capital get from interval to period of time. On the other hand, geometric common demonstrates compound return, that makes equilibrium of investment value of former yr a theory base for calculation of upcoming calendar year’s return i.

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