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 be able to sell only 10,000 room-nights, which cost $80 per room per night to service. you spent $20.00 million on the hotel in 2008, and your cost of capital is 10%. the current going price to sell the hotel is $15 million. if the estimated demand is 10,000 room-nights, the break-even price is $ per room, per night. (hint: remember that the cost of capital is the opportunity cost, or true cost, of making an investment.)

Fanning books buys books and magazines directly from publishers and distributes them to grocery stores. the wholesaler expects to purchase the following inventory: april may june required purchases (on account) $ 111,000 $ 131,000 $ 143,000 fanning books accountant prepared the following schedule of cash payments for inventory purchases. fanning books suppliers require that 85 percent of purchases on account be paid in the month of purchase; the remaining 15 percent are paid in the month following the month of purchase. required complete the schedule of cash payments for inventory purchases by filling in the missing amounts. determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.

The – effect means tommy's – will shift because he has less purchasing power. as a result, he may choose the regular-size steak instead of the larger "hunter's portion" he prefers. the – effect means tommy may spend some of the money he saved by ordering the smaller steak to order a bigger salad.