Vegas Lodging, a 120-room hotel, requires $5,000,000 for construction. Equity will be $2,800,000 and the rest will be a loan of $2,200,000 at an interest rate of 15%. The owner desires an annual return of 25% on his equity. The income tax rate will be 30%. Depreciation cost will be $85,000 per year. Interests and depreciation are the major fixed charges. Other fixed costs and fixed charges will be $50,000. Undistributed operating expenses will total $900,000. The estimated direct expenses of the room department will be $25 per room sold. Occupancy is projected to be 75%. Assuming a double occupancy of 40% and a $20 premium for a double room. Using the Hubbart Formula, Determine the target ADR, Single room rate, and double room rate. 6. What is the Income before Taxes and Interest? 7. What is the room expense? 8. What is the Room Revenue? 9. What is ADR? 10. What is Double Room rate