One of the three strategies for selecting a target market is to determine potential profitability from that segment.
Indicate whether the statement is true or false
Which of the following statements is true based on the following data for the Chippewa Hotel?
Gross Revenue IAUOE
October 150,000 37,500
November 160,000 36,000
Past opening management fees are 2 of gross revenue plus 10 of
IAUOE
A) The fee is the same for both months
B) The total fee will be greater in November than October
C) The total fee for October will be 6,800
D) Cannot tell from the information given
Both parties to a management contract should benefit from it.
Indicate whether the statement is true or false
The foundation of any segmentation strategy is behavioral differences in customers.
Indicate whether the statement is true or false
The only difference between Ka and Kde is that Ka includes the ________ and Kde doesn't.
A) before tax cost of debt B) after tax cost of debt
C) cost of equity D) leverage ratio
A benefit bundle is all of the benefits a customer derives from buying a service.
Indicate whether the statement is true or false
In the WACC approach to NPV, the interest tax shield is accounted for in the:
A) Ka B) initial project investment
C) project cash flows D) none of the above
Contract management companies utilize special secrets that help them to be successful.
Indicate whether the statement is true or false
If July revenue for a hotel is 400,000 and IAUOE is 100,000, which of the following fee systems would be most desirable for the management company?
A) basic fee of 3 of gross revenue plus 10 of IAUOE
B) basic fee of 4.5 of gross revenues
C) basic fee of 2 of gross revenue plus 13 of IAUOE
D) flat fee of 19,000
The equity investment in a project consists of:
A) neither retained earnings or any new stock issued
B) only retained earnings
C) only any new stock issued
D) retained earnings and any new stock issued
Quick Reply
