The recently opened Grand Hyatt Wailea Resort and Spa on Maui cost $600 million
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The recently opened Grand Hyatt Wailea Resort and Spa on Maui cost $600 million, about $800,000 per room, to build. Daily operating expenses average $135 a room if occupied and $80 a room if unoccupied (much of the labor cost of running a hotel is fixed). At an average room rate of $500 a night, a marginal tax rate of 40 percent, and a cost of capital of 11 percent, what year-round occupancy rate do the Japanese investors who financed the Grand Hyatt Wailea require to break even in economic terms on their investment over its estimated 40-year life? What is the likelihood that this investment will have a positive NPV? Assume that the $450 million expense of building the hotel can be written off straight line over a 30-year period (the other $150 million is for the land which is not depreciable) and that the present value of the hotel’s terminal value will be $200 million.
[Solved] The recently opened Grand Hyatt Wailea Resort and Spa on Maui cost $600 million
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- Submitted On 04 Jan, 2015 11:33:46
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SLN method for 40 Yr life = 600M/40 = $1,500,000
Economic Profit = Total Income - Total Expenses - Opportunity Lost Cost
At Break Eve...
The recent labor force survey reports the information labor force
UNIT IV Scholarly Activity With the times quickly changing, and the recent division
The recently opened Grand Hyatt Wailea Resort and Spa on Maui cost $600 million
SLN method for 40 Yr life = 600M/40 = $1,500,000
Economic Profit = Total Income - Total Expenses - Opportunity Lost Cost
At Break Even, Eco profit = 0
So Total Income - Total Expenses - Opportunity Cost = 0<...