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Veronica Passe runs a B&B hotel in a resort area near Lake Tahoe. Depreciation on the hotel is $60,000 per year. Veronica employs a maintenance
Veronica Passe runs a B&B hotel in a resort area near Lake Tahoe. Depreciation on the hotel is $60,000 per year. Veronica employs a maintenance person at an annual salary of $41,000 and a cleaning person at an annual salary of $24,000. Real estate taxes are $10,000 per year. The rooms rent at an average price of $75 per person per night including breakfast. Other costs are laundry and cleaning service at a cost of $10 per person per night and the cost of food which is $15 per person per night. a) How many rentals must Veronica book each year to break-even? b) How many rentals must Veronica book each year to achieve a profit of $60,000
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