Please answer Problem 8.

Problem 8 A proposed budget inn, Bruno's, is scheduled to open in two months. The owner, Lou Bruno, seeks your advice on pricing. Although he knows he will have to modify your Cost Approaches to Pricing 429 recommendations based on market prices, he desires a cost perspective. He gives you the following information: nnib bovie song Lou's investment = $2,000,000 Lou's desired ROI = 20 percent 1- Lou's marginal tax rate = 30 percent Funds borrowed = $3,000,000 Interest rate = 12 percent annual Forecasted annual costs: day Depreciation, property taxes, and insurance = $600,000 Management fees = 5 percent of room sales Rooms department expenses = 25 percent of room sales or Undistributed operating expenses = $200,000 + 5 percent of room sales Assume: Bloem Non-room profit centers generate $10,000 of annual department profit. Assume the Bruno has 150 guestrooms, and it expects to have paid occupancy of 70 percent. . Required: po 1. Determine the required ADR. 2. Assume the Bruno has both single and double rooms. Further assume that 80 percent of rooms sold are doubles and that doubles sell for $20 more than the price of a single. What is the average selling price of a double? Problem 8 A proposed budget inn, Bruno's, is scheduled to open in two months. The owner, Lou Bruno, seeks your advice on pricing. Although he knows he will have to modify your Cost Approaches to Pricing 429 recommendations based on market prices, he desires a cost perspective. He gives you the following information: nnib bovie song Lou's investment = $2,000,000 Lou's desired ROI = 20 percent 1- Lou's marginal tax rate = 30 percent Funds borrowed = $3,000,000 Interest rate = 12 percent annual Forecasted annual costs: day Depreciation, property taxes, and insurance = $600,000 Management fees = 5 percent of room sales Rooms department expenses = 25 percent of room sales or Undistributed operating expenses = $200,000 + 5 percent of room sales Assume: Bloem Non-room profit centers generate $10,000 of annual department profit. Assume the Bruno has 150 guestrooms, and it expects to have paid occupancy of 70 percent. . Required: po 1. Determine the required ADR. 2. Assume the Bruno has both single and double rooms. Further assume that 80 percent of rooms sold are doubles and that doubles sell for $20 more than the price of a single. What is the average selling price of a double