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Done Photo (20 of 24) Name 2. The Econolodge Deluxe is a proposed 500-room motel in White Haven, Pennsylvania. The total Investment. The income tax
Done Photo (20 of 24) Name 2. The Econolodge Deluxe is a proposed 500-room motel in White Haven, Pennsylvania. The total Investment. The income tax rate is 40%. The projected occupancy rate for the motelis 75% rest will be financed by a bank loan at an interest rate of 6%. The owner desires a 10% return on cost to construct the motel is $90,000,000. Of this amount, the owner will invest 50% and the Fixed costs are estimated to be $800,000 while undistributed operating expenses are estimated at $300,000. The coffee shop is expected to produce a profit of $250,000 for the year. Room's department expenses are estimated at $100,000. Assume 365 days in a year. (20 points total, Determine the average room rate using the Hubbart formula (14 points). b. if double rooms are sold at a premium of $10 over single rooms, what is the price of use the back of this page if necessary). a. Single and double rooms? Assume a double occupancy rate of 40% (6 points) INO 00
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