Required-2: Using your analysis to prepare the budgeted income statement for year 2, prepare two additional income statements (also in Excel) under the following two scenarios:

1) Strategy 1: High Price management will work to maintain an average price of $220 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 70% with this strategy.

2) Strategy 2: High Occupancy management will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $180, they can achieve an occupancy rate of 90%. All other estimates for year 2 remain the same as before.

Required-3: Once you have completed your 3 budget scenarios, make a recommendation to management (original plans, high price, high occupancy....what makes the most sense and why).