Suppose a hotel has annual fixed costs of 3.4 million for its 400 rooms; average daily room rents for $50. and avg variable costs of $10 for each room. Assume 365 day per year operation;
1. how much net income will motel make if it is half full in the year.
2. find the break even point in # of rooms rented; what % occupancy for the year is needed to break even.
This posting contains a question on break even point.