What is your breakeven price

Reference no: EM13691080

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 2008, and your cost of capital is 10%. The current going price to sell the hotel is $15 million. What is your breakeven price?

Reference no: EM13691080

Questions Cloud

Taxes have on a monopolist’s price and quantity : What effect would the following taxes have on a monopolist’s price and quantity?

Survey respondent in context of a stated preference survey : From the perspective of stated preference methods in general, explain the concept of “consequentiality.” Describe how consequentiality might be conveyed to a survey respondent in the context of a stated preference survey.

What is your breakeven price : 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.

What is the guaranteed annual income : Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..

Assume quantity of labor-technological change are constant : What is the increase in output if the quantity of capital rises 30% (Assume the quantity of labor and technological change are constant)

Two transactions add to personal consumption expenditures : Assume that a grower of flower bulbs sells its annual output of bulbs to an Internet retailer for $80,000. The retailer, in turn, brings in $125,000 from selling the bulbs directly to final customers.

User Account

All Pages