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Jason Bilodeau is the managing partner of a business that has just finished building a 60-room motel. Bilodeau anticipates that he will rent these
Jason Bilodeau is the managing partner of a business that has just finished building a 60-room motel. Bilodeau anticipates that he will rent these rooms for 17,500 nights next year (or 17,500 room-nights). All rooms are similar and will rent for the same price. Bilodeau 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. Data Table Variable operating costs Fixed costs $3 per room-night Salaries and wages $ 165,000 Maintenance of building and pool 52,000 168,000 Other operating and administration costs $ 385,000 Total fixed costs Print Done More Info The capital invested in the motel is $1,400,000. The partnership's target return on investment is 20%. Bilodeau 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. Print Done
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