Question: 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

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 percent general occupancy rate for the 50 rooms at an average $110 room rate for the next year. Should International Hotels accept the contract?

2. What percentage of occupancy of the 50 rooms in question would make International Hotels indifferent about accepting the offer?

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