pplication Exercises 1. In your own words, describe what hospitality finance is. 2. Why is hospitality a multifaceted industry and therefore a challenge to hospitality gradu- ates? 3. What is the range of profit margins for each segment of the restaurant industry? Search the National Restaurant Association website at www.restaurant.org. 4. How does labor intensiveness complicate financial management of a hotel, restaurant, theme park, club, or any hospitality operation? 5. Do you believe the manufacturing industry or the hospitality industry carries a higher in- ventory level as a percentage of total assets? Please explain. 6. How does a boom or a bust in the economy impact the travel segment of the hospitality industry in terms of airlines, hotels, and rental cars? 7. The concept of time value of money is introduced in this chapter. As a follow-up exercise, please visit a local bank and ask for the current list of interest rates the bank pays a customer on a regular checking account, a three-month certificate of deposit, and a one- year certificate of deposit. Explain why the bank has different rates for each of these three investment instruments. 8. Interview at least three friends or family members who have the financial capacity to lend you $1,000. Ask them if you presented them with a business proposal, would they prefer to lend you $1,000 plus interest or to invest their $1,000 for an ownership position in your venture? Also ask them the rationale behind their decision. 9. Interview a controller of a hospitality business in your area and write a brief article on "A Day in the Life of a Controller."