The Inviting Inn has 500 available guest rooms. For a certain week next month, the anticipated transient demand for rooms is as follows:

The inn has the possibility of booking another group of 100 rooms for the nights of Tuesday, Wednesday, Thursday, and Friday of that week at a discounted rate of $60 per room. The inn’s rack rate for transient guests is $80, and its marginal cost per room sold is $15.

a. Assuming the new group is booked, calculate the additional net sales revenue (gross sales revenue less marginal costs) to the inn.

b. What factors, other than net sales revenue, might you consider before committing to this new group sale?LO1

Transcribed Image Text:

Monday 200 Tuesday 200 Wednesday 200 Thursday 200 Friday 100 Saturday 50 Sunday 50 The Inviting Inn also has committed the following number of rooms for group sales during the same week: Monday 200 Tuesday 200 Wednesday 300 Thursday 300 Friday 100 Saturday 100 Sunday 100