Assume the same facts as in the preceding problem. However, also assume that the variable costs per room, per day are $10.
1. Suppose the best estimate is a 62% general occupancy rate for the 50 rooms at an average $110 room rate for the next year. Should Marriott accept the contract?
2. What percentage of occupancy of the 50 rooms in question would make Marriott indifferent about accepting the offer?