13-22 Cost-plus target return on investment pricing, Jason Bra dy is the managing partner of a business d building a 60-room motel. Brady anticipates that he will rent these rooms for 15,000 nights next year (or 15,000 room-nights). All rooms are similar and will rent for the same price. Brady estimates the following operating costs for next year: Variable operating costs Fixed costs S3 per room-night Salaries and wages Maintenance of building and pool Other operating and administration costs $177,000 38,000 190,000 $405,000 Total fixed costs The capital invested in the motel is $1,500,000. The partnership's target return on investment is 20% Brady expects demand for rooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. Required: 1. What price should Brady charge for a room-night? What is the markup as a percentage of the full cost of a room-night? 2. Brady's market research indicates that if the price of a room-night determined in requirement 1 is reduced by 10%, the expected number of room-nights Brady could rent would increase by 10%. Should Brady reduce prices by 10%? Show your calculations