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Majestic Lodge* This case was originally set in the 1960's in rural Vermont. The Majestic Lodge is an old, but well maintained property that has...
Assignment questions
List all the relevant decision alternatives in Mr. Kacheck's proposal.
For each alternative from question 1, list the annual expenses that are incremental to that decision alternative but are not related to the room/days occupied.
What is the incremental contribution margin per occupied room/day during the off-season?
For each decision alternative calculate the occupancy rate necessary to break even on the incremental annual expenses.
What alternative do you recommend? Why?
Evaluate the profitability of the Lodge as an investment for its owners. Does this affect your answer to question 5?
Do you have any recommendations for the owners?
