Skyview Manor

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SkyView Manor Case Question 1 variable Cost Linen service $13,920.00 Supplies $1,920.00 1/2 Misc Exp $3,657.00 Total $19,497.00 Revenue $160,800.00 CM Ratio = 1- (19497/160800) 0.87875 Average room 160800/7680 rooms $20.94 contribution margin per room $18.40 Fixed Cost Depreciation 30000 Property tax 4000 Insurance 3000 Mortgage 21716 Salaries $27,480.00 payroll Tax $5,496.00 Repairs $17,204.00 Utilities $6,360.00 1/2 misc $3,657.00 Total 118913 Break even 6463 rooms / 120 nights 54 rooms per night Question #2 Rooms 17 weekends of 2 nights 34 nights Lost Contribution Margin 8 rooms x34 (120 x2/7) 5005 Incremental CM 72 Rooms x 34 nights x $5 12240 Additional profit = 12240 - 5005 $7,725 Question #3…show more content…
Even building a pool without heating and a bubble would require occupancy at 57.9% much greater than the managers estimated 40%. With this in mind I would not recommend building a pool at all. Considering the year is 1962 it is unlikely many ski resort hotels have a pool, although that may be a trend in the future. This may be considered a luxury and attract more clientele, however this type of clientele may conflict with those looking for a quiet summer retreat in the woods. I think the better option is to open the resort in the summer without the additional expense of a pool, and pick up the additional revenue. They can always add a pool in the future if that is needed to keep up with the competition. Question 7: It is interesting to note the hotel has changed hands several times over the years. The resorts net profit after tax was $11,643. For comparison the median income in 1962 was $6000 a year. If they opened in the summer and worked all year, the increase in estimated after tax net income is $4492.80 for a total of $16,135.80. It is unclear how many investors there are in the Hotel but I think they would benefit greatly from opening in the summer. It appears the hotel is a fairly sturdy business, is in position to grow, and is not taking on great risks. The quality to the investment return seems to be on par with the amount of risk and overall I think it would be a

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