Matt Mona is in the process of purchasing a motel near a college town. The motel costs $3,500,000. The lot costs $500,000. Furniture and furnishings cost $700,000 and should be recovered in seven years (seven‐year MACRS property), while the cost of the motel building should be recovered in 39 years (39‐year MACRS real property placed in service on January 1). The land will appreciate at an annual rate of 5% over the project period, but the building will have zero salvage value after 25 years. When the motel is full (100% capacity), it takes in (receipts) $6,000 per day for 365 days per year. The motel has fixed operating expenses, exclusive of depreciation, of $430,000 per year. The variable operating expenses are $220,000 at 100% capacity and vary directly with percent capacity down to $0 at 0% capacity. If the interest rate is 10% compounded annually, at what percentage capacity must this motel operate in order to break even? (Assume that Matt’s tax rate is 30% and the project life is 25 years.)