Jason Beck is the managing partner of a business that has just finished building a 60-room motel. Beck anticipates that he will rent these rooms for 20,000 nights next year (or 20,000 room-nights). All rooms are similar and will rent for the same price. Beck estimates the following operating costs for next year: (Click the icon to view the operating costs.) (Click the icon to view additional information.) Read the requirements More info - Requirement 1. What price should Beck charge for a room-night? What is the markup as a percentage of the full cost of a room-night? Begin by selecting the formula, then enter the amounts and solve for the room price per night. The capital invested in the motel is $1,200,000. The partnership's target return on investment is 20%. Beck expects demand for rooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. Price per room-night per room-night Data table Requirements $ 3 per room-night Variable operating costs Fixed costs 1. What price should Beck charge for a room-night? What is the markup as a percentage of the full cost of a room-night? 2. Beck's market research indicates that if the price of a room-night determined in requirement 1 is reduced by 15%, the expected number of room-nights Beck could rent would increase by 10%. Should Beck reduce prices by 15%? Show your calculations. Salaries and wages $ 171,000 42,000 Maintenance of building and pool Other operating and administration costs 127,000 $ 340,000 Total fixed costs Print Done Print Done