Sapphire Motel (Sapphire) is structured as a private company that has 20 motel rooms and is ideally located in a major regional town within easy walking distance to great shopping stores, eating places, the regional hospital and the town's major sporting venue. Over the past three years the occupancy rates of the rooms have been steady at around 80% occupancy which is sufficient to cover all operating expenses (including the interest and principal repayments on a five-year loan that is up for renewal later this month and make a reasonable profit for the owners. During the past 12 months occupancy rates have dropped down to a point where revenues can no longer cover costs. Also of concern is fact that a new set of self-contained apartments across the road from Sapphire's motel are alimost complete and it is rumored that their rates will be 10% less than those currently charged by Sapphire. in other developments, the next major regional town, which is 20 kilometers away, has increased employment opportunities and is in the final phases of a significant upgrade to its city centre that boasts a major department store and a new undercover sporting arena with conference facilities. Sapphire has recently been warned by the bank that the loan they currently have with the bank will not be renewed and therefore they will need to seek a new loan facility from another lender. Responding to questions about the viability of the business, the owners of Sapphire are confident that they will be able to negotiate a new loan with another lender and their occupancy rates will increase shortly as they are entering their peak season and there are not enough apartments in the city to cope with this increased seasonal demand. Complete the following: a. Is there a going concern issue in this case? Explain your response. (5 marks available) b. Are there any factors that will ease or mitigate the issues surrounding the going concern issues in this case? Explain your response. (5 marks available)