Nanaimo Inn has 60 rooms and expects occupancy to be 70%. The owner wants to earn 10% return on total assets after tax. Total assets: $2,400,000 Income tax rate: 25% Depreciation: straight line (20 years) on assets of $1,600,000 (no salvage) Other fixed expenses: $300,000 Direct costs: $100,000 Indirect costs $200,000 Mortgage interest: 10% on balance owing of $900,000 Mortgage principal: Annual principal payment required: $45,000 Room service has an operating loss of $50,000 Required: (a) Calculate the average required room rate using the above information. (8 marks) (b) If the differential between single and double rooms is $12 per night and 35% of the rooms sold are doubles, calculate the single and double room rates. (4 marks)