The Way Ahead is a 40-room roadside motel and it expects its occupancy in 2016 to be 75%. The capital invested in the motel is €1,280,000 and the owners expect an after-tax net profit of 14%. The tax rate is 30%. From vending machines and parking charges, they expect to make about €65,000 in 2016. The direct expenses of running the rooms are expected to be

€400,000, while the overhead expenses for 2016 are expected to be as follows:

· Administration and general expenses €225,000

· Sales and marketing expenses €68,000

· POM €72,000 · Interest €75,000 · Depreciation €150,000 · Insurance €64,000 · Other expenses €155,000 Based on this information, a what should be the ADR of the Way Ahead in 2016?
b what should be the single and double room rates if the motel operates at 24% double occupancy and has a difference of €15 between its single and double rates? Assume one common room size all with the same rates.