Practice_Prelim__1_ANSWERS

Practice_Prelim__1_ANSWERS - Prelim 1 Fall 2007 SKAR ANSWER...

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Prelim 1 - Fall 2007 ANSWER KEY SKAR Page 1 I. OVERVIEW (70 points) 35 questions @ 2 pts. each 1. Which of the following is a public goal for a hotel development project? (a) To create brand awareness (b) To minimize risk (c) To gain strategic advantage (d) To increase market share (e) To build a tax base 2. Which of the following scenarios would increase the value of a luxury hotel property? For Questions 3-12 below, match the development team members with the responsibility or responsibilities they are most likely to have on the team. Possible responses: Which team member is primarily responsible for: 3. Designing the placement of the tile for the hotel bathrooms? A 4. Advising on whether there should be tile in the hotel bathrooms? C 5. Obtaining the funding for construction? D 6. Attracting investors? D 7. Hiring the bellhops? C 8. Coordinating the production of the CD’s? A 9. Determining the placement of pipes for the hotel’s water system? B 10. Negotiating a zoning variance from the city? D 11. Determining the look and feel of the building? A 12. Monitoring the hotel operation on behalf of its owners? E
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Prelim 1 - Fall 2007 ANSWER KEY SKAR Page 2 13. Based on our discussions in lecture, which of the following is not typically a consideration when determining a hotel concept? 14. The best measure of an operating hotel’s value is the: (a) Net present value of cash flows from operations (b) Net present value of the proceeds from the reversion (c) Net present value of cash flows from operations minus the proceeds from the reversion (d) Net present value of cash flows from operations plus the proceeds from the reversion (e) Net present value of the project’s revenues 15. When evaluating a feasibility study, a potential equity investor is most concerned about whether the project will:
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