The Arome Hotel, a 200 rooms hotel is projected to cost $9 900 000 inclusive of land, building, equipment and furniture. An additional $100 000 is needed for working capital.

The hotel is financed with a loan of $7 500 000 at 12% annual interest with the owners providing cash of $2 500 000. The owners required rate of return on their investment is 15% annually. A 75% occupancy is estimated, and the income tax rate is estimated 40%. Rooms department direct expenses are $10 per room sold.