Tyler rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $100,000 and his target profit is $20,000. For Tyler, to earn his target profit, he will need to rent out ________ rooms.

A) 100
B) 1,500
C) 20,000
D) 1,000
E) 250

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Target Profit

The desired level of profit a company aims to achieve within a specific time frame.