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There are 4 hotels on a Caribbean island. The first has 90 rooms with 80% occupancy. The 2nd has 120 rooms and 70% occupancy, and
There are 4 hotels on a Caribbean island. The first has 90 rooms with 80% occupancy. The 2nd has 120 rooms and 70% occupancy, and the 3rd and 4th hotels each have 90 rooms of inventory. Hotel 3 runs an annual occupancy of 65% and hotel #4 runs 80% occupancy for the year. Calculate the weighted average occupancy rate of the island that has just these four hotels. 8) You have an opportunity to purchase an automated wood floor vacuuming and resurfacing machine for your hotel. The machine retails for $40,000. It will last for 5 years with an estimated residual (trade-in) value of $5,000 dollars at the end of its useful life. It will save $10,000 in labor costs the first year. Those savings will increase by 10% every year after that. It will take an investment in parts in years 2 and 4 only. The parts will cost $2000 in each of those years. Calculate the net present value of the project given your company's hurdle rate of 12%. Ignore depreciation and income tax implications in your model/grid
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