Problem 1

The

King Hotel

has 400 rooms. Each room rents for $62 per day and has a variable cost of $12 per day.

The hotel’s monthly fixed costs are $450,000.

(Assume that each month has 30 days.)

Required:

1.

Compute the breakeven point in rooms

rented.

2.

Compute the daily occupancy percentage that the hotel must have in order to break even.

3.

Compute the total number of rooms that must be paid for and occupied

per month

to earn a profit of

$100,000?

The second half of the 1940s was a period of A. recession. B. no economic growth. C. very slow economic growth. D. fairly high economic growth.

XYZ operates a movie theater. A movie ticket is $16.00 per ticket, and costs nothing. On average 40% of the customers will buy a soda ($6 each, cost $1); 60% will buy food ($6 average price with a cost of $2). The fixed costs are $387,600.

1. Calculate the break-even quantity and $sales for tickets, soda and food(10 points)  
2. The theater wishes to make $96,900 profit. Calculate the target profit quantity and sales for tickets, soda and popcorn (10 points)

Make sure to show your weighted average calculations, "bundle" calculations, and final answers.

Marilyn Helm Retailers is attempting to decide on a location for a new retail outlet. At the​ moment, the firm has three​ alternatives: stay where it is but enlarge the​ facility; locate along the main street in nearby

Newbury​;

or locate in a new shopping mall in

Hyde Park.

The company has selected the four factors listed in the following table as the basis for evaluation and has assigned weights as​ shown:

​a) Based on the given​ information, the best location for Marilyn Helm Retailers is to open the new retail outlet in

Hyde Park

​, with a total weighted score of

54.5054.50.

​(Enter your response rounded to two decimal​ places.)

​b) A new subway station is scheduled to open across the street from the present location in about a​ month, so its third factor score should be raised to

40.

​Then, the best location for Marilyn Helm Retailers is to open the new retail outlet in

Hyde Park

Hyde Park

Newbury

Present Location

​, with a total weighted score of

nothing.

​(Enter your response rounded to two decimal​ places.)

Question 2: AHP
A tourism company want to evaluate four hotels and select the best one using four criteria project's COST, CLEANNESS and DISTANCE and SIZE of the HOTEL. Assume that the company prefers; cleanness two times more than size, cost two times more than distance, and distance 1.5 times more than size.

1. Calculate the weights of each criteria
2. Generate the pair-wise comparison of hotels based on each criterion using the scale of Saaty (1-9)
3. Calculate the score of each hotel based on each criterion
4. Calculate the score of each hotel. Justify the best selection for the company.
5. Calculate CI, and CR. What does the value of CT means?

For the reaction below, Kp = 29.21 at 800K. Calculate the equilibrium partial pressures of the reactants and products if the initial pressures are Ppcl5 = 0.488atm & Ppcl3 = .4900atm.

PCL5(g) <----> PCL3(g) + Cl2(g)

PCL5: ______ atm

Cl2: _______ atm

PCl3: ______ atm

Application: Elasticity and hotel rooms.

The following graph input tool shows the daily demand for hotel rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool.

Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.

Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $350 per room per night.

If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Big Winner (Falls or Rises ) from ( ) rooms per night to ( ) rooms per night. Therefore, the income elasticity of demand is (Negative or Positive) , meaning that hotel rooms at the Big Winner are ( A normal good or An inferior good ).

If the price of an airline ticket from LAX to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Big Winner (Falls or Rises) from ( ) rooms per night to ( ) rooms per night. Because the cross-price elasticity of demand is (Negative or Positive), hotel rooms at the Big Winner and airline trips between LAX and LAS are (Substitutes or Complements).

Big Winner is debating decreasing the price of its rooms to $325 per night. Under the initial demand conditions, you can see that this would cause its total revenue to (Decrease or Increase)  . Decreasing the price will always have this effect on revenue when Big Winner is operating on the (Elastic or Inelastic) portion of its demand curve.

A group of entrepreneurs want to purchase a rural hotel.

The renovation and purchase of the hotel has an estimated cost of €525,000.

This capital investment will be depreciated consistently over the next 5 years.

It is estimated that there will be 4,000 rooms total occupation per year, at a rate of €100 per room/night. Room occupation will rise by 5% year over year.

Running costs are estimated as €290,000 for the first year and will increase by 5% year over year.

The tax rate is 35%.

Step 1: Calculate the initial free cash flows correctly.

Step 2: If the partners require a minimum return of 8% on their investments, would you recommend that these businessmen buy the hotel? (Assume a continuous increase in cash flow of 1% from the 5^th year forwards). Why or why not?