Compute the anticipated room rate using the Rule-of Thumb, orBuilding Cost rate.
(Note: More information may be GIVEN than is needed.)
| GIVEN: | Number of rooms | 800 |
| Average Occupancy Percentage firsttwo years | 60% |
| Cost of erecting the building | $64,500,000 |
| Cost of acquiring the land | $ 8,000,000 |
| Legal costs to incorporate | $ 500,000 |
| Upfront costs to lease furnitureand TV’s | $ 100,000 |
| Landscaping costs | $ 1,250,000 |
| Cost of tearing down the oldstructure | $ 750,000 |
