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Imagine that you are investing 3 million in a hotel in Colorado. The available data for conducting the breakeven analysis for the hotel is as

Imagine that you are investing 3 million in a hotel in Colorado. The available data for conducting the breakeven analysis for the hotel is as follows: - 600 rooms - $50 per night - The fixed costs are $1,200,000 per year - The variable costs are 30% of the total revenue - 60% of the total revenue is from the hotel's rooms department and 40% are generated from all the other operating departments (telephone, food, drinks, internet, selling point, etc.)

Please calculate:

  • No. of rooms per day for break-even
  • Required occupancy for break-even
  • Breakeven point in sales (per year)
  • Is this investment potentially profitable given your breakeven analysis result interpretation? If so, what is the amount of profits per year?

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