1. What are the fixed costs of production measured in dollars?
2. For 6 tables, what is the average fixed cost, average variable cost, and the marginal cost?

How does bundling payments, like insurance companies paying a per diem rate for all hospital hotel-type services, encourage cost savings on the part of the hospital?

Evans Park

Evans Park is a small amusement park that provides a variety of rides for children and teens.   In a typical summer season, the park sells twice as many child tickets as adult tickets.   Adult ticket prices are $18 and the children’s price is $10.   Revenue from food and beverage concessions is estimated to be $60,000, and souvenir revenue is expected to be $25,000.   Variable costs per person (child or adult) are $3.25.   Fixed costs amount to $150,000.   Build a model to show the profitability of this park based on these facts.  

REQUIRED: Show the model with adult sales at the break-even point.

HINT: The EvansPark sheet gives a starting point.   After entering labels and formulas for your model, use Goal Seeking to find where to adjust adult ticket sales so that profit equals zero.   “Goal Seek” is found under the “What-If Analysis” button of the “Data” ribbon.

Over the past six months, Six Flags conducted a marketing study on improving their park experience. The study cost $3.00 million and the results suggested that Six Flags add a kid's only roller coaster.

Suppose that Six Flags decides to build a new roller coaster for the upcoming operating season. The depreciable equipment for the roller coaster will cost $50.00 million and an additional $5.00 million to install. The equipment will be depreciated straight-line over 20 years.

The marketing team at Six Flags expects the coaster to increase attendance at the park by 5%. This translates to 110,714.00 more visitors at an average ticket price of $39.00. Expenses for these visitors are about 12.00% of sales.

There is no impact on working capital. The average visitor spends $23.00 on park merchandise and concessions. The after-tax operating margin on these side effects is 31.00%. The tax rate facing the firm is 36.00%, while the cost of capital is 8.00%.

What is the NPV of this coaster project if Six Flags will evaluate it over a 20-year period? (Six Flags expects the first year project cash flow to grow at 5% per year, going forward)
(Express answer in millions)

Over the past six months, Six Flags conducted a marketing study on improving their park experience. The study cost $3.00 million and the results suggested that Six Flags add a kid's only roller coaster.

Suppose that Six Flags decides to build a new roller coaster for the upcoming operating season. The depreciable equipment for the roller coaster will cost $50.00 million and an additional $5.00 million to install. The equipment will be depreciated straight-line over 20 years.

The marketing team at Six Flags expects the coaster to increase attendance at the park by 5%. This translates to 107,097.00 more visitors at an average ticket price of $38.00. Expenses for these visitors are about 17.00% of sales.

There is no impact on working capital. The average visitor spends $22.00 on park merchandise and concessions. The after-tax operating margin on these side effects is 29.00%. The tax rate facing the firm is 34.00%, while the cost of capital is 10.00%.

What is the NPV of this coaster project if Six Flags will evaluate it over a 20-year period? (Six Flags expects the first year project cash flow to grow at 5% per year, going forward)
(Express answer in millions)

Write a hotel blog about a hotel that you visited recently. Remember that you need to write the text in perfect tense. Please write minimum 30, maximum 40 sentences. Also specify which hotel category suits your hotel.

Many University campuses sell parking permits to their students allowing them to park on campus in designated areas. Although most students complain about the relatively high cost of these permits, what annoys many of these students even more is that after having paid for their permits, vacant parking spaces in the designated lots are very difficult to find during much of the day. Many end up having to park off campus anyway, where permits are not required. Assuming the University is unable to build new parking facilities on campus due to insufficient funds, what recommendation might you propose that would remedy the problem of students with permits being unable to find places to park on campus? (Hint: Think in terms of demand and supply analysis and how a market functions.)

1. The Cody Hotel, a proposed 50-room hotel (rooms-only lodging facility), planned to build in mid-Michigan. The owner is concerned about the average daily room rate (ADR), construction costs, borrowing costs, and their impact on profits. He provides you with the following information:

Determine the required ADR to achieve the owner's goal of earning an ROI of 15%. (20 points)

Net Present Value Method—Annuity for a Service Company

Amenity Hotels Inc. is considering the construction of a new hotel for $81 million. The expected life of the hotel is 7 years with no residual value. The hotel is expected to earn revenues of $22 million per year. Total expenses, including depreciation, are expected to be $16 million per year. Amenity Hotels’ management has set a minimum acceptable rate of return of 9%.

a. Determine the equal annual net cash flows from operating the hotel. Enter your answer in million. Round your answer to two decimal places.
$ million

b. Compute the net present value of the new hotel, using the present value of an annuity of $1 table above. Round to the nearest million dollars. If required, use the minus sign to indicate a negative net present value.
Net present value of hotel project: $ million

c. Does your analysis support construction of the new hotel?
Yes/No , because the net present value is positive/negative .

Net Present Value Method—Annuity for a Service Company

Welcome Inn Hotels is considering the construction of a new hotel for $70 million. The expected life of the hotel is 10 years with no residual value. The hotel is expected to earn revenues of $19 million per year. Total expenses, including depreciation, are expected to be $14 million per year. Welcome Inn management has set a minimum acceptable rate of return of 10%. Assume straight-line depreciation.

a. Determine the equal annual net cash flows from operating the hotel. Round to the nearest million dollars.
$ million

b. Calculate the net present value of the new hotel using the present value of an annuity of $1 table above. Round to the nearest million dollars. If required, use the minus sign to indicate a negative net present value.
Net present value of hotel project: $ million

c. Does your analysis support the purchase of the new hotel?
, because the net present value is  .