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Owners of a nationwide motel chain are considering locating a new motel in Snyder, Arkansas. The complete cost of building a 150-unit motel (excluding furnishings)
Owners of a nationwide motel chain are considering locating a new motel in Snyder, Arkansas. The complete cost of building a 150-unit motel (excluding furnishings) is $5 million; the firm estimates that the furnishings in the motel must be replaced at a cost of $1.875,000 every 5 years. Annual operating and maintenance cost for the facility is estimated to be $125,000. The average rate for a unit is anticipated to be $55/day. A 15-year planning horizon is used by the firm in evaluating new ventures of this type; a terminal salvage value of 20% of the original building cost is anticipated: furnishings are estimated to have no salvage value at the end of each 5-year replacement interval: land cost is not to be included Determine the break-even value for the daily occupancy percentage based on a MARR of (a) 0%, (h) 10%, (c) 15%, and (d) 20% (Assume that the motel wiltl operate 365 dayslyear.) Owners of a nationwide motel chain are considering locating a new motel in Snyder, Arkansas. The complete cost of building a 150-unit motel (excluding furnishings) is $5 million; the firm estimates that the furnishings in the motel must be replaced at a cost of $1.875,000 every 5 years. Annual operating and maintenance cost for the facility is estimated to be $125,000. The average rate for a unit is anticipated to be $55/day. A 15-year planning horizon is used by the firm in evaluating new ventures of this type; a terminal salvage value of 20% of the original building cost is anticipated: furnishings are estimated to have no salvage value at the end of each 5-year replacement interval: land cost is not to be included Determine the break-even value for the daily occupancy percentage based on a MARR of (a) 0%, (h) 10%, (c) 15%, and (d) 20% (Assume that the motel wiltl operate 365 dayslyear.)
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