Caesars Palace'E' Las Vegas made headlines when it undertook a $25 million renovation. During the renovation, the hotel closed its then named Roman Tower, which was last updated 14 years prior, and started a major renovation of the 56? rooms housed in that tower. On Ianuarv 1, 2016, the newly renamed Julius Tower reopened, replacing the Roman Tower. In addition to renovating the existing rooms and suites in the former Roman Tower, 20 guest rooms were added to the Roman Tower. With the renovation completed, Caesars expects the Iulius Tower room rate to average around $149 per night. This increase, a $25 or 20.2% increase, reflects, in part, the room improvements. Assume that the annual fixed operaiing costs for the Iulius Tower in Caesars Palace'EE?l Las THe'egas are $5,000,000. This amount represents an increase of $200,000 per vear compared to prerenovation. Also assume that the variable cost per hotel room night after the renovation is $2.7; before the renovation, the variable cost per room night was $20. Assume that the hotel occupancy rate for Caesars Entertainment Corporation is 92%, and that the average hotel occvupanc'j.r rate in Las Vegas overall is 33%. Requirements 1. What cost types, associated with a hotel room in the Iulius Tower, are variable with respect to hotel room occupancy? What cost types are fixed with respect to hotel room occupancy? 2. Before the renovation, how many hotel room nights were needed to break even in the original Roman Tower {now ]ulius Tower)? Using Caesars' occupancy rate, what was the margin of safety in units before the renovation? What is the margin of safety in units if the Las Vegas hotel occupancy rate is used instead of Caesars' occupancy rate? 3. After the renovation, how many hotel room nights are needed to break even in the Julius Tower? Using Caesars' occupancy rate, what is the margin of safety in units after the renovation? What is the margin of safety in units if the Las Vegas hotel occupancy rate is used instead of Caesars\" occupancy rate? Which hotel occupancy rate estimate is more appropriate in this case? Why