Problem 12 built in mid- proposed Harris Place (a rooms-only facility) is to be rate the Michigan Jeremy Harris, the owner, is concerned about the average daily room with construction costs, borrowing costs, and their impact on profits. He provides you following information: 1. Proposed costs of the lodging facility: $400,000 Land $2,000,000 Building $1,000,000 Equipment 2. Financing; $1,000,000 Equity (desired return on investment (ROI-15 percent) Debt (8 percent annual interest rate) 3. Income tax rate: 40 percent 4. Property taxes: $120,000 per year 5. Fire insurance: $30,000 (annual premium) 6. Depreciation Building ar life, straight-line method, so salvage value total Equipment: life, e value of percent revenue operating expenses: $300,000 annually an 7