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katrin [286]
3 years ago
6

In early 2008, you purchased and remodeled a 120-room hotel to handle the increased number of conventions coming to town. by mid

-2008, it became apparent that the recession would kill the demand for conventions. now, you forecast that you will only be able to sell 20,000 room-nights that cost on average $50 per room per night to service. you spent $20 million on the hotel in 2009, and your cost of capital is 10%. the current going price to sell the hotel is $15 million. what is your breakeven price?
Business
1 answer:
fomenos3 years ago
3 0

To solve this problem, first let us calculate for the total cost:

Total cost = Capital cost + Cost of capital

Total cost = $ 20 M + 0.10* $ 20 M

Total cost = $ 22 M

The breakeven point would be the price in which the total earnings is equal to the total cost. Therefore:

$ 15M + 20,000 * X = $ 22 M

Where X is the breakeven price in dollars per room per night

Calculating for X:

20,000 * X = $ 7 M

X = $ 350

<span>Therefore the break even price is $ 350 per room per night.</span>

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Hope this helps!

3 0
3 years ago
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Answer:

a.

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Jan. 31                 Product Warranty Expense                 $15,160

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b.

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Jan. 31                 Product Warranty Payable                     $355

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5 0
3 years ago
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Explanation:

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aleksley [76]

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Read more on business niche here: brainly.com/question/1519816

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