Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are a savvy asset manager and have determined an opportunity to grow revenue
in one of the hotels in your portfolio by investing in a social media campaign. The
operating cost associated with said campaign is $50,000 and you expect it will drive
an incremental 1% occupancy for the foreseeable future. If the subject hotel
encompasses 175-rooms and the projected average daily rate is $200 how much has
the value of this asset increased if the capitalization rate for similar assets is 6.5%.
(Use a 360 day year in your analysis.)
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Transcribed Image Text:You are a savvy asset manager and have determined an opportunity to grow revenue in one of the hotels in your portfolio by investing in a social media campaign. The operating cost associated with said campaign is $50,000 and you expect it will drive an incremental 1% occupancy for the foreseeable future. If the subject hotel encompasses 175-rooms and the projected average daily rate is $200 how much has the value of this asset increased if the capitalization rate for similar assets is 6.5%. (Use a 360 day year in your analysis.)
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