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Glitz hotel rents hotel rooms for $120ight. At the current sales level of 400 rooms per night, Glitz currently makes a profit of $30/room: Sales
Glitz hotel rents hotel rooms for $120ight. At the current sales level of 400 rooms per night, Glitz currently makes a profit of $30/room: Sales Costs Profit Per room $120 90 30 It costs Glitz $90ight to maintain a room ($60 in depreciation, $25 in variable maintenance and $5 in fixed booking costs). Glitz has been approached by Conventions2000.com to purchase a block of 300 rooms for $80/room per night. If this special order is accepted, Conventions2000.com would take care of all booking costs for the rooms booked through Conventions2000.com, and the $5 fixed booking costs can be eliminated. Required: Should Glitz accept this special offer (include both qualitative and quantitative analysis)
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