A proposed hotel, Willards, is scheduled to open in one year. The business will be organized...
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A proposed hotel, Willards, is scheduled to open in one year. The business will be organized as a sole proprietorship. The owner, Monica Willards seeks your advice on pricing. Although she knows she will have to modify your recommendations based on market prices, she desires a cost perspective. She gives you the following information: $5,000,000 Monica's investment Monica's desired ROI 25% Monica's average tax rate Funds borrowed 25% $5,000,000 10% annual Interest rate Forecasted annual costs: Fixed charges (other than interest expense and property taxes) Property taxes Management fees Rooms department expenses Undistributed operating expenses $500,000 $200,000 3% of room sales and $100,000 per year 10% of room revenue plus $100,000 per year $300,000 %3! Other profit center's activities: Food and beverage Telecommunications $50,000 annual profit $10,000 annual loss Assume Willards has 150 guest rooms and it expects to have paid occupancy of 65%. Required: Determine the required ADR. 1. 2. Assume Willards has four types of rooms as follows: Singles, doubles, kings, and suites. The kings are priced at $20 more than the doubles and the doubles are 10% higher than the singles while the suites are priced at twice the single price. Forty percent of the rooms sold are doubles, 20% sold are kings and 10% of suites. What is the average price of a king and a suite? II|| A proposed hotel, Willards, is scheduled to open in one year. The business will be organized as a sole proprietorship. The owner, Monica Willards seeks your advice on pricing. Although she knows she will have to modify your recommendations based on market prices, she desires a cost perspective. She gives you the following information: $5,000,000 Monica's investment Monica's desired ROI 25% Monica's average tax rate Funds borrowed 25% $5,000,000 10% annual Interest rate Forecasted annual costs: Fixed charges (other than interest expense and property taxes) Property taxes Management fees Rooms department expenses Undistributed operating expenses $500,000 $200,000 3% of room sales and $100,000 per year 10% of room revenue plus $100,000 per year $300,000 %3! Other profit center's activities: Food and beverage Telecommunications $50,000 annual profit $10,000 annual loss Assume Willards has 150 guest rooms and it expects to have paid occupancy of 65%. Required: Determine the required ADR. 1. 2. Assume Willards has four types of rooms as follows: Singles, doubles, kings, and suites. The kings are priced at $20 more than the doubles and the doubles are 10% higher than the singles while the suites are priced at twice the single price. Forty percent of the rooms sold are doubles, 20% sold are kings and 10% of suites. What is the average price of a king and a suite? II||
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Related Book For
Fundamentals of Physics
ISBN: 978-1118230725
10th Extended edition
Authors: Jearl Walker, Halliday Resnick
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