2002 2003 2004 2005 2006

Revenues
Motel Income 823,708 838,164 833,371 861,409 828,879 3%
Restaurant Lease Income 24,035 26,206 37,836 36,166 39,706 2%
Mngmt Fee (from affiliated firm) 0 0 0 222,353 0 3%
Total Revenue 847,743 864,370 871,207 1,119,928 868,585
897,575 10%
Expenses -4%
Wages and Benefits 281,723 181,956 228,854 397,959 219,707 44%
Advertising and Promotion 13,848 14,066 20,057 16,653 19,073 17%
Equipment Rent 20,390 13,559 698 0 0
Insurance 16,154 8,553 5,978 15,351 11,470 -0.354132
Interest & Bank Charges 33,868 11,231 14,613 14,365 11,790 0.257744
Memberships and Licenses 1,222 1,018 870 808 797 0.738921
Office Expenses 5,456 5,906 2,365 3,071 1,763 -0.447915
Professional Fees 16,824 19,278 24,623 18,404 14,350 5%
Property Taxes 44,902 46,111 47,292 49,072 51,827
Repairs and Maintenance 15,790 40,907 23,592 20,869 28,860
Royalties 81,659 61,631 66,081 60,624 75,880
Room Supplies 21,590 9,973 11,481 14,393 19,239
Telephone 14,822 8,836 10,208 10,340 14,343
Travel 4,985 4,371 1,670 1,985 608
Utilities 36,910 41,582 46,934 47,839 62,131
Loyalty Prog. & Reserv'n Fees 23,511 19,811 15,378 11,311 16,068
Vehicle Expenses 14,170 23,259 21,460 11,319 13,656
Amortization 69,361 79,508 79,652 76,391 75,493
Total Expenses 717,185 591,556 621,806 770,754 637,055
EBT 130,558 272,814 249,401 349,174 231,530
Taxes 24,284 50,743 79,035 64,947 43,064
Tax Rate 18.6% 18.6% 31.7% 18.6% 18.6%
EAT 106,274 222,071 170,366 284,227 188,466
 Projected Income Statement growth rate
2007 2008 2009 2010 2011
850096 871856 894173 917061 940535
46291 53968 62919 73353 85519
0 0 0 222353 0
896387 925824 957091 1212767 1026053

230397 241607 253362 265689 278616

20027 40053 42056 44159 46367
21410 22480 23604 24784 26023
12044 12646 13278 13942 14639
-0.252817 12380 12998 13648 14331 15047
1.567916 836.85 879 923 969 1017
65.75% 1851 1944 2041 2143 2250
(0) 15067.5 15821 16612 17443 18315
-0.016971 54418 57139 59996 62996 66146
-0.668389 30303 31818 33409 35080 36833
-0.668389 79674 83658 87841 92233 96844
20201 21211 22272 23385 24554
15060 15813 16604 17434 18306
638 670 704 739 776
65238 68499 71924 75521 79297
16871 17715 18601 19531 20507
14339 15056 15809 16599 17429
79268 83231 87393 91762 96350
668908 702353 737471 774344 813062
243107 255262 268025 281426 295497
45217 47478 49852 52345 54962
19% 19% 19% 19% 19%
197889 207784 218173 229082 240536
3%
 Cash Flows
Revenues 2002 2003 2004 2005
Room Revenuess 776,148 767,097 808,194 654,127
Telephone Revenue (Guests) 12,403 13,255 10,643 6,541
Other Income Excluding Phone 12,403 13,255 10,643 6,541
Motel Income 800,954 793,606 829,480 667,210
Restaurant Lease Income 24,035 26,206 37,836 36,166
Mngmt Fee (from affiliated firm) 0 0 0 0
Total Revenue 824,989 819,812 867,316 703,376 731,511

Expenses
Wages/Benefits - VC 81,723 81,956 78,854 97,959
Wages/Benefits - Manager - FC 90,000 90,000 90,000 90,000
Advertising and Promotion 13,848 14,066 20,057 16,653
Equipment Rent 20,390 13,559 698 0
Insurance 16,154 8,553 5,978 15,351
Interest & Bank Charges 33,868 11,231 14,613 14,365
Memberships and Licenses 1,222 1,018 870 808
Office Expenses 5,456 5,906 2,365 3,071
Professional Fees 16,824 19,278 24,623 18,404
Property Taxes 44,902 46,111 47,292 49,072
Repairs and Maintenance 15,790 40,907 23,592 20,869
Royalties 81,659 61,631 66,081 60,624
Room Supplies 21,590 9,973 11,481 14,393
Telephone - Guests 0 0 0 0
Telephone - Office 0 0 0 0
Travel 4,985 4,371 1,670 1,985
Utilities 36,910 41,582 46,934 47,839
Loyalty Prog. & Reserv'n Fees 23,511 19,811 15,378 11,311
Vehicle Expenses 14,170 23,259 21,460 11,319
Amortization 0 0 0 0
Total Expenses 523,002 493,212 471,946 474,023
Cash Flow Before Reserve & Taxes 301,987 326,600 395,370 229,353
Less: Reserve for Replacement 33,000 32,792 34,693 28,135
Cash Flow Before Taxes 268,988 293,808 360,677 201,218
Taxes 0 0 0 0
Tax Rate 0.0% 0.0% 0.0% 0.0%

Net Cash Flow 268,988 293,808 360,677 201,218

 Forecasted Cash Flows estimated Growth rate = 5%
2006 2007 2008 2009 2010 2011
686834 721175 757234 795096 834851 876593
6868 7212 7572 7951 8349 8766
6868 7212 7572 7951 8349 8766
700570 735599 772379 810998 851548 894125
37974.3 39873.015 41866.666 43960 46158 48465.9
0 0 0 0 0 0
738545 775472 814246 854958 897706 942591

Expenses
24% 102857 108000 113400 119070 125023 131274
94500 94500 94500 94500 94500 94500
17486 18360 19278 20242 21254 22317
733 770 808 848 891 935
16119 16924 17771 18659 19592 20572
15083 15837 16629 17461 18334 19250
848 891 935 982 1031 1083
3225 3386 3555 3733 3919 4115
19324 20290 21305 22370 23489 24663
51526 54102 56807 59647 62630 65761
21912 23008 24158 25366 26635 27966
63655 66838 70180 73689 77373 81242
15113 15868 16662 17495 18370 19288
0 0 0 0 0 0
0 0 0 0 0 0
2084 2188 2298 2413 2533 2660
50231 52742 55380 58149 61056 64109
11877 12470 13094 13749 14436 15158
11885 12479 13103 13758 14446 15169
0 0 0 0 0 0
498457 518655 539863 562131 585512 610063
240088 256817 274383 292827 312193 332528
36927 38774 40712 42748 44885 47130
203160 218043 233671 250079 267308 285399
0 0 0 0 0 0
0% 0% 0% 0% 0% 0%
203160 218043 233671 250079 267308 285399
timated Growth rate = 5%
 STEP 3: VALUATION OF S

Step 3 - Discounted Cash Flow Model

WACC for Motel 8.413%

Offer Price for Motel $2,900,000

1 2 3
2006 2007 2008
Net Cash Flow for the Year 203160 218043 233671
Add: Terminal Value 2,535,576 2,721,326 2,916,374
Total Cash Flow 2,738,736 2,939,369 3,150,045

PV of Total Cash Flow 2,526,206 2,500,871 2,472,138

Offer Price for Super 8 Motel $2,900,000

Sum of PV (DCF Value: Super 8 Motel) $14,715,356
Net Loss on Sale ($11,815,356)
TEP 3: VALUATION OF SUPER 8 MOTEL - GUELPH

4 5 6
2009 2010 2011
250079 267308 285399
3,121,157 3,336,187 3,561,975
3,371,236 3,603,495 3,847,374

2,440,415 2,406,119 2,369,606

14,715,356