Answer: See explanation and attachment
Explanation:
a. What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff (excluding housekeeping) are assumed fixed for all occupancy levels?
Price = $180
Less: Variable Costs:
House keeping staff = $23
Utilities = $7
Amenities = $3
Total variable costs = $33
Contribution margin = $147
B. Determine the contribution margin for a room night under the proposed weekend pricing.
Price = $120
Less: Variable Costs:
House keeping staff = $23
Utilities = $7
Amenities = $3
Total variable costs = $33
Contribution margin = $87
C. Prepare a differential analysis showing the differential income for an average weekend between the existing (Alternative 1) and discount (Alternative 2) price plan.
Check attachment for solution
D. Should management accept the proposed weekend pricing plan? Explain.
No. From the calculation in C, there is reduction in income.
Answer:
More-for-more
Explanation:
A value proposition refers to the value a company promises to deliver to customers if they decide to purchase their product. A value proposition is also a declaration of intent or a statement that introduces a company's brand to consumers by informing the customers what the company stands for, how it is being operated, and why it deserves their patronage.
Answer:
a) 12.5%
Explanation:
Labor force = Unemployed labor + Part time employed + Full time employed = 15 + 25 + 80 = 120
Unemployment rate = Unemployed / Labor force *100 = 15/120 *100 = 12.5%
A. 12.5%
Answer:
-1,185,282.35
Explanation:
The average daily collections are the average number of payments times the average value of a payment, so:
Average daily collections = =355 * 945
Average daily collections = $335,475
The present value of the lockbox service is the average daily receipts times the number of days the collection is reduced, so:
PV = (4 day reduction)( $335,475)
PV = $1,341,900
The daily cost is a perpetuity. The present value of the cost is the daily cost divided by the daily interest rate. So:
PV of cost = (.3*355)/.00068
PV of cost = $106.5/.00068= $156,617.65
The firm should take the lockbox service. The NPV of the lockbox is the cost plus the present value of the reduction in collection time, so:
NPV = $156,617.65 - 1,341,900
NPV = -1,185,282.35