Handle the increased number of con-ventions

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Reference no: EM13915259

In early 2008, you purchased and remodeled a 120-room hotel to handle the increased number of con-ventions 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 $20million on the hotel in 2008, and your cost of capital is 10%. The current going price to sell the hotel is $15million.

What is your breakeven price?

Reference no: EM13915259

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