Unit 4 Study Exercises Question 4.1 otal: 19 marks) with bathrooms. The Hotel is considering building a budget hotel that offers clean small roo company anticipates that 120 rooms will rent for 39,600 room-nights per year. The market price for equivalent rooms is $60 per night. Hotel+ estimates that the capital cost will be $6,500,000 and the company would like an annual return of 10%. Following are the estimated annual operating costs: 4 Variable operating costs $21 per room night Fixed costs: Salaries and wages $420,000 Building maintenance 89,000 I General administration 280,000 Total fixed costs $789,000 Required 1. What is the full cost per room-night? 2. Can Hotel+ meet the targeted return on investment based on the estimated costs and revenue? Show your calculations. 3. A tour operator has offered $30 per night for 20 rooms during a time of the year that there is likely to be at least that many rooms vacant. Should Hotel+ accept this offer? Show your calculations.