5.A motel has 30 rooms and expects 70% occupancy next year. The owners investment is presently $520,000, and they expect a 12% after-tax annual return on their investment. Cost estimates for the first year of business are as follows:

Known costs
Income tax	19,705
First mortgage interest expense	35,900
Second mortgage interest expense	19,600
Depreciation expense: Building	31,600
Consolidate depr: Furniture and Equipment	23,400
Indirect expenses	44,800
Direct expenses	47,300

a. Calculate the motels required average room rate to cover all expenses and provide the owners with their desired return on investment.

b. Calculate the average single and double room rates, assuming a 60% double occupancy and a $12 difference between singles and doubles.