Changed da house,
Changed da look.
BTW, my bathrobe's usually pink
and we don't have a fireplace.
Other than that,
it's pretty accurate...
Psst...click the words above to navigate.
Best viewed, unfortunately, in Internet Explorer.
Tuesday, November 09, 2004
~ Present State of Mind ~
The Question:
Imagine that the ComfortAssured is a 180-room Winnipeg Hotel with assets of $10 million and liabilities of $7 million. The hotel's owners are seeking a 14% annual ROI. The hotel is subject to 40% tax and pays 9% interest on the loan of $6.75 million. Other fixed costs, which include administration, depreciation, and energy, total $2 million per annum. The food and beverage department generates $400,000 in profit prior to the deduction of fixed costs. The hotel projects an average occupancy of 65% and is open 365 days a year. The rooms department has estimated a variable housekeeping cost of $15 per room sold.
Determine the average room rate required to provide the owners with their target ROI.
The Answer:
I dunno. But I hope it won't be too expensive in March 2005, so Tony and I can get a really decent honeymoon for AUD$1,000 in South East Asia.
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