Following is the information given by the owner of a hotel. You are required to advise him what rent should be charged from customers per day so that he is able to earn 25% profit on cost other than interest.

(a) Staff salaries Rs 80,000 per annum

(b) Room attendant’s salary Rs 2 per day: The salary is paid on daily basis and services of room attendant are needed only when the room is occupied. There is one attendant for one room.

(c) Lighting, heating and power: The normal lighting expenses for a room are Rs 50.

Power is used only in winter and normal charge per month if occupied for a room is Rs 20.

(d) Repairs to buildings Rs 10,000 per annum

(e) Linen, etc. Rs 4,800 per annum

(f ) Sundries Rs 6,600 per annum

(g) Interior decoration and furnishing Rs 10,000 per annum (h) Cost of buildings Rs 4,00,000. Rate of depreciation is 5%
(i) Other equipment Rs 1,00,000. Rate of depreciation is 10%
(j) Interest at 5% may be charged on its investments of Rs 5,00,000 in the buildings and equipment (k) There are 100 rooms in the hotel and 80% of the rooms are normally occupied in summer and 30%
of the rooms are occupied in winter.
You many assume that period of summer and winter is six months each. Normal days in a month may be assumed to be 30.