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Take-a-Break Travel Company offers spring break travel packages to college students

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Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics:

 

Package Specifications	Cancun	Jamaica	Cost Data
Oceanfront room; number of nights	6	4	$ 55	/night
Meals:
Breakfasts	6	4	$ 10	/ea
Lunches	7	5	$ 15	/ea
Dinners	6	4	$ 25	/ea
Scuba diving trips	3	2	$ 75	/ea
Water skiing trips	4	2	$ 50	/ea
Airfare (round trip from Miami)	1	1	$ 375	(Cancun),
			$ 550	(Jamaica)
Transportation to and from airport	1	1	$ 25	(Cancun),
			$ 40	(Jamaica)

 

The Cancun trip sells for $1,750, and the Jamaica trip sells for $1,500, and both packages allow two bags to be checked for free.

 

Required:

1. What are the current profit margins on both trips?

2. Take-a-Break's management believes that it must drop the price of each trip by $100 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.