7. (12 pts.) The King Hotel, a proposed 200-room hotel, will cost $12,000,000 to construct. An estimated additional $1,500,000 will be invested in the business as working capital. Of the total $13,500,000 investment, $8,000,000 is to be secured from a bank loan at the rate of 8 percent interest; and $5,500,000 will be funded by the owners. The projected occupancy rate is 70 percent for the year. The owners desire 18 percent return on equity after the corporation pays income taxes of 21 percent. The estimated undistributable expenses, not including income taxes and interest expense, total $1,300,000. The estimated direct expenses of the rooms department are $35 for each room sold. Consider a year to have 365 days. Given the information, determine the average price of a room using the Hubbart Formula