20Home20Assignment20Portion.pdf QUESTION 1 - 14 MARKS The Ritz-Carlton has hotels and resorts in the Carribean and Mexico. You are provided with the following budget information for 2020. Suppose that for one of these hotels, management expects occupancy rates to be 95% in December, January and February, 85% in November, March and April; and 70% the rest of the year. This hotel has 300 rooms and the average room rental is $290 per night of this, on average, 10% is received as a deposit the month before the stay, 60% is received in the month of the stay and 28% is collected the month after the stay. The remaining 2% is never collected Most of the costs of running the hotel are fixed. The variable costs are only $30 per occupied room per night. Fixed salaries (including benefits) run S400,000 per month, depreciation is $350,000 per month, other fixed operating costs are $120,000 per month and interest expense is $600,000 per month. Variable costs and salaries are paid in the month they are incurred. Depreciation is recorded at the end of each quarter, other fixed operating costs are paid as incurred and interest is paid each June and December a) Prepare a monthly cash budget for this Ritz-Carlton Hotel for the entire year. For simplicity assume that there are 30 days in each month. b) What is the expected annual profit for this Ritz-Carlton Hotel for the 2020 year? c) How much would the hotel's annual profit increase if occupancy rates increased by 5% each month in the off season that is, from 70% to 75% in May through October)? lenovo