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Problem 1: Imagine your recently constructed 100 room hotel has determined that it will use the rule of a thousand to set room rates. The total cost of building the hotel was $15,000,000 and 20% of the infrastructure investment relates to non-accommodation hotel activities such as Food and Beverage. What price should be charged per room night?
A. $130
B. $140
C. $110
D. $150
E. $120
Demand is estimated to be 100,000 units annually. What is the price if a markup of 40% on total cost is used to determine the price?
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