Located near a national park on the Yarra River, Colbee Hotel was built in 1915 by the Top End Railway. In an effort to supplement its lodging revenue, the hotel decided in 2012 to begin manufacturing and selling small wooden canoes decorated with symbols hand-painted by local indigenous Australians. Due to the great success of the canoes, the hotel began manufacturing and selling paddles as well in 2015. Many hotel guests purchase a canoe and paddles for use in self-guided tours of the Yarra.

Because production of the two products began in different years, the canoes and paddles are produced in separate production facilities and employ different laborers. Each canoe sells for $500, and each paddle sells for $50. the variable cost for canoe is $300 and paddle is $40, while the fixed costs are $80,000 and 10,000 for canoe and paddle respectively. $30,000 of common fixed costs for a customer service hotline used for both canoe and paddle customers.
The hotel's accounting system data show an average sales mix of approximately 300 canoes and 1200 paddles each season.

a. Use Cost-Volume-Profit analysis to calculate the break-even point in units for :
-The canoe product line only (i.e., single-product setting)
-The paddle product line only (i.e., single-product setting)

b. Use Cost-Volume-Profit analysis to calculate the break-even point in units for both the canoe and paddle product lines combined (i.e., the multiple-product setting).

c. If both the variable and fixed costs associated with the canoe product line increased by 5%, how many canoes and paddles would need to be sold in order to earn a target income of $96,000?

d. Calculate the hotel's margin of safety (both in units and in sales dollars) for Colbee Hotel, assuming the same facts as in Requirement b, and assuming it sells 700 canoes and 2,500 paddles next year.

LargeTech Manufacturing has the following estimates for a new semiconductor product. The machinery costs $800K, and it will have no salvage value after 8 years. LargeTech is in the highest tax bracket. Income starts at $200K per year and increases by $100K per year, except that it falls by $300K per year in years 7 and 8. Expenses start at $225K per year and increase by $50K per year. What are the BTCFs and taxable income under: Straight-line depreciation?

Please show answer using excel

1. Many people in the small town of Econville have complained that there is no park for children to use afterschool. There are 20 households in the town, 10 who have children and 10 who do not. The households with children value the park being built at $100 each while the other households value it at $20 each. The town estimates that the cost of building a park is $600. All households earn the same income.

   1. (a) Would describe the park as a public good? Explain.

   2. (b) The first proposal is fund the park with a flat tax. What is the minimal tax per household required to build the park? Who will and who will not support such a tax and will the park be built?

   3. (c) A second proposal is a tax that only applies to the households with children. What tax per household will ensure that the park is built? Who will and who will not support such a tax? Why?

   4. (d) Athirdproposalisataxpaymentthatisproportionaltothebenefiteachhousehold receives from the park. In this proposal, how much will each household be expected to pay? Who will and who will not support such a tax? Why?

   5. (e) Evaluate the three policies listed and state which you will choose and why.

1.Pick the statement that BEST describes the LAW OF DIMINISHING MARGINAL UTILITY.

2.

SUGAR (and other ingredients) in the making of candy bars is

3.

A gasoline station, very near a professional football stadium, parks cars on its lot to make money on game days. Last year it charged $10.00 per car and parked 700 cars. This year it lowered the parking price to $6.00 and parked 1,000 cars. Is the demand for this parking lot INELASTIC or ELASTIC?

4.

Last year, a local amusement park sold 10,000 tickets at $40.00 each. This year, it lowered the ticket price to $30.00 and sold 15,000 tickets. Is the demand for this amusement park INELASTIC or ELASTIC?

Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost to build the motel is estimated at $320,000; Value Lodges estimates furnishings for the motel will cost an additional $620,000 and will require replacement every 5 years. Annual operating and maintenance costs for the motel are estimated to be $140,000. The average rental rate for a unit is anticipated to be $30/day. Value Lodges expects the motel to have a life of 15 years and a salvage value of $900,000 at the end of 15 years. This estimated salvage value assumes that the furnishings are not new. Furnishings have no salvage value at the end of each 5-year replacement interval.

Assuming average daily occupancy percentages of 50%, 60%, 70%, and 80% for years 1 through 4, respectively, and 90% for the 5th through 15th years, a MARR of 6%/year, 365 operating days/year, and ignoring the cost of land, should the motel be built?

Base your decision on an annual worth analysis. AW = ?

(in thousands)

There are 750,000 residents in a city. Based on a government poll, they fall within three groups regarding their willingness to pay for the construction of a park.

- 200,000 of the residents are not willing to pay for the park at all,

- 250,000 residents are willing to pay $12,

- 300,000 are willing to pay $100.

The cost of the park will be $15 million. Should it be built? Why or why not?

Would this answer change if the only way to pay for it is to divide the cost equally across each of the 750,000 residents? Why or why not?

Suppose marginal benefit from a hectare of for a public park (assume it is a pure public good) for two groups of consumers (A and B) is given by: MBa = 10 − Q and MBb = (8 – Q)/2 where Q is the number of hectares of the park. To simplify our analysis, assume that there are only 1 consumer of each type. The marginal cost to provide the park is a constant $5.

a) What is the socially efficient number of hectares for the park?

b) Assume that the consumers each makes a voluntary contribution to a fund which will be used to build the park. The size of the park depends on the amount of money collected. How many hectares will be built in the end? Assume both consumers know the marginal cost and marginal benefit function of each type.

Mini Case Study – Sales and Marketing at the Edgewater Hotel Seattle Set on the Pier 67 in the Seattle Central Waterfront, the Edgewater is one of the most iconic properties in all of the Pacific Northwest. The hotel first opened as a temporary building, meant to attract visitors for the 1962 World's Fair. Today has built a rich history to match its ideal location and luxurious furnishings, but there’s a growing debate among the Sales & Marketing team about the direction of its market positioning. Bob Peckenpaugh, General Manger of the property, needs your help in deciding on their strategy A History of Rock ‘n Roll The Edgewater became famous both inside and outside of Seattle for hosting some of the biggest names in music. During the height of the “British Invasion” of America, the Beatles helped put the Edgewater on the map. A few months after the Beatles famous set on the Ed Sullivan Show, the Beatles spent the third stop on their first tour of America at the (then named) Edgewater Inn. Seattle hotel owners were afraid of riots and damage from a visit, so Don Wright, then Manager of the property took them in as he knew they would get a lot of attention for the Edgewater Inn. He was right.

1. Who do you think are the customers of Edgewater today? Does that align with the product?

2. What approach option do you think that Bob should take? Why is that the right approach or why are the other options the wrong approach?

Here is the ORIGINAL data of the Sport Hotel project: 1. Projected outflows First year (Purchase Right, Land, and Permits) $1,000,000 Second Year (Construct building shell $2,000,000 Third Year: (Finish interior and furnishings) $2,000,000 TOTAL $5,000,000 2. Projected inflows If the franchise is granted hotel will be worth: $8,000,000 when it opened If the franchise is denied hotel will be worth: $2,000,000 when it opened. The probability of the city being awarded the franchise is 50%. Suppose that everything is the same as in that problem except TWO things: the worth of the hotel, should the city be awarded the franchise, is not $8 million but some unknown smaller number; and the probability of getting the franchise is NOT 50% but is upgraded to 80%. What must the new worth of the hotel when the franchise is granted be in order for the NPV of the Sporthotel project to be equal to exactly zero?