Sunny Beach Resort is a family-friendly budget resort. Management has projected 14,800 room rentals for the year, based on the 60-room resort. The capital invested in the motel is $1,500,000. The target return on investment is 20%. The resort, in an effort to earn the target return on investment, plans to price the rooms at full price plus a markup.

Using data in the attached Excel file (accessed through Module 1 or by clicking "Next" at the bottom of this page) address the following:

1. What price should Sunny Beach charge for a single room rental per night? What is the markup
2. as a percentage of the full cost of a single room rental per night?
3. Market research indicates that if the price of a room-night determined in requirement 1 is reduced by 10%, the expected number of room-nights Sunny Beach could rent would increase by 10%. Should they reduce prices by 10%? Show your calculations.

Answer rating: 100% (QA)

To find the price Sunny Beach Resort should charge for a single room rental per night and the markup ... View the full answer