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NPV: The cash flow divided for (1+cost of capital) per each year. Then the SUM of each cash flow with the NINV in the year 0)

IRR: We applied the excel formula with the cash flows (year 1-5) with the net investment (year 0).

Payback period: We subtract to our net investment each cash flow until we obtained a positive balance.

Profitability Index: (PV of future cash flows)/(Initial Investment)

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Banorte Credit for enterprises: $4,000,000 at an 11.99% interest rate with a tax rate of 20% (ISR for interests in México) Ki = 9.59% cost for Debt after taxes.

Common Equity: $8,000,000 - a MRP of 3.5% applied to the original credit´s rate. Cost for common equity: 15.49%

Cost of Capital (WACC): 13.52%

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Step 6: Price determination and Net Cash Flows 

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Step 6: Price determination and Net Cash Flows 

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We estimated the price per each type of room (CV/NC) to develop the sales units. The Bahía de Banderas average occupancy in 2020 was from 40% to 50%.

We made an estimation of the nights sold per week (according to an occupancy of 40%) and multiplied it by 52 (weeks per year) to be able to determine the sales per year. This process was carried out by type of room (Junior and Master Suite). Also, a monthly subrogate rent for a restaurant is a benefit for us. Revenues maintain an annual growth of 7.5%. The sum of the costs (VC and FC) are multiplied monthly to estimate the annual operational expenses with an annual increase of 4.5% of inflation.

Following the process, the depreciation of all the equipment is applied to have the EBT. Later, taxes are applied (ISR 30%) to obtain the EAT. Finally the charge of depreciation is obtained again (because is not a cash flow) and its respective NWC is applied to obtain the yearly NCF.

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All items broken down by each area of investment: Land, Construction, Furniture, Equipment, and the Permits to know the cost of the project. Finally, the Net Working Capital (10% of the revenues in year 1) is applied to have the Net Investment.

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We started with a list of our fixed and variable costs, where we specified how many people would occupy each position to set a salary, including the cost of water, gas, the internet and light, conducting prior research to give us an idea of how much these services cost.
And in our variable costs are the extras that are needed in the rooms and the cleaning material. As well as the costs of marketing and advertising for the hotel

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Step3: Identify the forniture for the hotel and its depreciation

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Step3: Identify the forniture for the hotel and its depreciation

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We investigated the cost of the furniture that each room and bathroom would have inside. We try to choose items that is consistent with the type of hotel designed and for each type of room.

In the same way, this heading includes the computer and telephony equipment used throughout the hotel.

Finally its respective depreciation was applied by the Mexican laws.

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First an investment was conducted on the cost of square meter in "Bahia Banderas"
Then it was investigated how much it would cost to build and design every room of the hotel

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We investigate the costs of the legal procedures to apply in various sources in the Bahía de Banderas municipality. In this case, all the permits required for the installation of sewage, land uses and even brand elaboration and protection with the IMPI. Finally, we estimated a final total cost by the sum for all the permits and official documents.