Assume you are the CFO of AIFS. Your analyst reports the following information (Use the following information for the remainder of the assignment):

• Current exchange rate is $1.16/€.

• Forward rate is $1.185/€.

• Expected final sales volume is 30,000. Worst case scenario is volume of 10,000. Best case scenario is volume of 36,000

. • Cost per student is €2500.

• Option premium is 2% of USD strike price.

• Option strike price is $1.165/€.

As the CFO, you decided to hedge using option contracts. Assuming expected final sales volume is 30,000, what are your total benefit/cost and the percentage benefit/cost from hedging (compared to no hedging)

No hedging at $1.16/€= $87,000,000

No hedging at $1.25/€= $93,750,000

No hedging at $1.08/€= $81,000,000

**Show full working solutions**

a) if the exchange rate remains at $1.16/€?

b) if the exchange rate will be $1.25/€?

c) if the exchange rate will be $1.08/€?

Q: During a televised, title prize fight at a Las Vegas hotel, Luis threw a punch which hit Michael in the face. As a result:

a: This would ordinarily be an act of negligence, however since Michael consented to the fight, he has no viable legal action against Luis. INCORRECT

b: This would ordinarily constitute strict liability for engaging in an inherently dangerous activity, however since Michael consented to the fight, he has no viable legal action against Luis.

c: This would ordinarily be an action of intentional infliction of emotional distress, however since Michael consented to the fight, he has no viable legal action against Luis.

d: This would ordinarily be a battery, however since Michael consented to the fight, he has no viable legal action against Luis.

Problem 8-21 (Algorithmic)

Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows:

Type I rooms do not have wireless Internet access and are not available for the Business rental class.

Round Tree's management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 140 rentals in the Super Saver class, 60 rentals in the Deluxe class, and 40 rentals in the Business class. Round Tree has 125 Type I rooms and 135 Type II rooms.

1. Use linear programming to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types.
   

   Variable	# of reservations
   SuperSaver rentals allocated to room type I
   SuperSaver rentals allocated to room type II
   Deluxe rentals allocated to room type I
   Deluxe rentals allocated to room type II
   Business rentals allocated to room type II

2. How many reservations can be accommodated in each rental class?
   

   Rental Class	# of reservations
   SuperSaver
   Deluxe
   Business

Scenario: Chief Complaint: Fever , AIDS. 40 year old white male resides at the hotel and lives on social security disability; diagnosed with AIDS, end stage, addiction, and agoraphobia presents with fever X2 weeks, no thermometer available, diarrhea daily. He tends to miss appointments because of his extreme anxiety in public places. He has not been on antiretroviral therapy due to his inability to regularly take medications. He is not in contact with case management, but there is a special hospice for homeless people with AIDS and perhaps it might be time to consider a referral for more supportive services.

Vital signs: 100/70 64 18 99.8 BMI:17   Gen: thin white male

skin: dry and flacking multiple nevi ruddy complexion, red flaky, rash on naso/ labial folds, and scalp + DANDROFF

HEENT:  Poor definition, gengevitus, shotty lymph nodes posterior / Anterior cervical.

Question: How would APRN (Nurse practitioner) prepare for home visit? Explore the practical concerns, the equipment APRN need to bring, and goals for the patient’s care.

Question: What might you want as Nurse practitioner to know from the case management and supportive services team?

Question: What specific things would you assess as Nurse practitioner at this visit?

Question: What are the essential elements of the history and physical today?

Question: What is your assessment as Nurse Practitioner ?

Question: What is your plan?

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 20 properties with an average of 150 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 70 percent, based on a 365-day year. The average room rate was $215 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows:

In year 1, the average fixed labor cost was $416,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open six new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 70 percent. Management has made the following additional assumptions for year 2:

The average room rate will increase by 8 percent.

Food and beverage revenues per night are expected to decline by 15 percent with no change in the cost.

The labor cost (both the fixed per property and variable portion) is not expected to change.

The miscellaneous cost for the room is expected to increase by 20 percent, with no change in the miscellaneous revenues per room.

Utilities and depreciation costs (per property) are forecast to remain unchanged.

Management costs will increase by 6 percent, and marketing costs will increase by 8 percent.

Other costs are not expected to change.

The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy (“High Price”), they will work to maintain an average price of $285 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 60.0 percent with this strategy. Under the alternative strategy (“High Occupancy”), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $194, they can achieve an occupancy rate of 80 percent. The current estimated profit is $75,358,035.

Required:

a. Prepare a budgeted income statement for year 2 if the “High Price” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

b. Prepare a budgeted income statement for year 2 if the “High Occupancy” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

c. Which is the correct pricing strategy for year 2.

A hotel has 8 air conditioners that each have a pre- determined area liberation rate. The carbon dioxide (COx) emission rates (in ppm) are measured for each. The pollution rate is expected to be a linear function of the area liberation rate.

(a) Write out the equation of the regression line. Interpret the slope and intercept in the context of this problem. Do they make sense? Include a scatter plot of the data with the correct regression line added.

(b) Test the hypothesis that the linear relationships exist between the predictor and response variable (ANOVA, t-test for β1, t-test for ρ, or a confidence interval for β1).

(c) What is the R2 for the SLR you have obtained? What does the value mean? Use it to evaluate the linear model.

(d) Plot the standardized residuals against the independent variable. What can you say about the regression using this graph? (HINT: Are there outliers? Does it seem reasonable to claim the data has a linear fit?)

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 24 properties with an average of 200 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 80 percent, based on a 365-day year. The average room rate was $220 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows.

In year 1, the average fixed labor cost was $420,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 80 percent. Management has made the following additional assumptions for year 2.

• The average room rate will increase by 10 percent.
• Food and beverage revenues per night are expected to decline by 25 percent with no change in the cost.
• The labor cost (both the fixed per property and variable portion) is not expected to change.
• The miscellaneous cost for the room is expected to increase by 30 percent, with no change in the miscellaneous revenues per room.
• Utilities and depreciation costs (per property) are forecast to remain unchanged.
• Management costs will increase by 5 percent, and marketing costs will increase by 5 percent.
• Other costs are not expected to change.

The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy (“High Price”), they will work to maintain an average price of $230 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 70.0 percent with this strategy. Under the alternative strategy (“High Occupancy”), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $190, they can achieve an occupancy rate of 90 percent. The current estimated profit is $259,025,200.

Required:

a. Prepare a budgeted income statement for year 2 if the “High Price” strategy is adopted.

b. Prepare a budgeted income statement for year 2 if the “High Occupancy” strategy is adopted.

c. Which is the correct pricing strategy for year 2.

The Sandhill Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31.

Other data:

Prepare an adjusted trial balance on May 31.

The Ivanhoe Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31.

Other data:

A. Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. (Post entries in the order of journal entries presented in the previous question.)

B. Prepare an income statement for the month of May.

C. Prepare a retained earnings statement for the month of May.

D. Prepare a classified balance sheet at May 31. (List current assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment .)

E. Identify which accounts should be closed on May 31.

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 15 properties with an average of 200 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 60 percent, based on a 365-day year. The average room rate was $205 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows:

In year 1, the average fixed labor cost was $411,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open three new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 60 percent. Management has made the following additional assumptions for year 2:

The average room rate will increase by 10 percent.

Food and beverage revenues per night are expected to decline by 25 percent with no change in the cost.

The labor cost (both the fixed per property and variable portion) is not expected to change.

The miscellaneous cost for the room is expected to increase by 30 percent, with no change in the miscellaneous revenues per room.

Utilities and depreciation costs (per property) are forecast to remain unchanged.

Management costs will increase by 5 percent, and marketing costs will increase by 5 percent.

Other costs are not expected to change.

The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy (“High Price”), they will work to maintain an average price of $232 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 50.0 percent with this strategy. Under the alternative strategy (“High Occupancy”), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $192, they can achieve an occupancy rate of 70 percent. The current estimated profit is $21,069,150.

Required:

a. Prepare a budgeted income statement for year 2 if the “High Price” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

b. Prepare a budgeted income statement for year 2 if the “High Occupancy” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

c. Which is the correct pricing strategy for year 2.