Goran Blomberg is interested in investing in a new rooms-only lodging property. He needs some financial projections for the proposed operations. He provides the following:

1. Room sales Average room rate $50 Average daily occupancy 65% Average rooms per day 50

2. Fixed labor- $12000/month

3. Other fixed expenses Depreciation$5000/month utilities $3000/month Insurance $1000/month Other $3000/month

4. Variable labor- 15%

5. Other variable expenses Other room expenses 5% Administration 4% Marketing5% Utilities 3% Other 8% 6. Income tax rate- 20%

Q. 1. Determine the projected net income using the above information. Assume the property will be open 365 days a year. 2. Determine the projected net income if the room rate is increased to $55. 3. Independent of #2, determine the projected net income if the room rate is increased to $60 and variable labor is18%