A small Disney World Hotel Resortis trying to assess when their hotel becomes profitable. Provided are the cost-analysis for the resort:

1.Total fixed cost per month for the hotel (electricity, phone bill, room service) is $7,000.

2.Total variable cost per month for each room (guest supplies, breakfast F&B, etc.) is $10.

3.Rate sale per room is $150.

4.How many rooms need to be occupied to make the hotel generate a positive cash flow (i.e., be profitable)?

5.If the hotel has 40 occupied rooms for the month of July, would it be profitable? If not, what do you recommend to management?