Cabin on the Hill

Location: Shawnee National Forest, IL

Description:

Cabin on the Hill is a beautiful destination for family reunions, vacations, or romantic getaways.  It is located in southern Illinois in the depths of the Shawnee National Forest. It is in the country and yet it is just a short drive from town.  This getaway has five beautiful cabins to choose from, complete with porches and hot tubs to enjoy the outdoors. Attached is a spreadsheet model designed to evaluate the investment in this business venture.  This resort has a current sales price of $2,100,000.

The spreadsheet model was created using assumptions according to market of the area for a business of this type and size.  These assumptions, highlighted in yellow, can be changed to be able to see the different assumptions that there might be. Based on the numbers put into our spreadsheet, the weighted average cost of capital would be 10.49% and the internal rate of return is 8.63%.  According to our calculations, we feel that the listed sales price is an unreasonable amount. A more reasonable amount would be to lower the sales price to $1,800,000.