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The NPV, however, would not take into consideration the depreciation as it is the price of cash. Even so, this is a component from the extensive-expression management fee, which also involves the maintenance charge and also the depreciation ingredient.

As in any lodge, the management price will probably not be specifically equal into the cash Charge. The administration cost will likely be tied to your lodge's revenue. On the other hand, the lodge's profits will likely be smaller sized compared to the money And so the administration rate is often larger.

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Most resort operators will only focus on the existing value of the Houses, or even the NPV. They do not typically evaluate the lengthy-term servicing fees, that has a massive impact on the very long-time period routine maintenance price of the resort.

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This will likely help the employees to be aware of what they are speculated to do and what the organization expects from them.

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