Kwara Hotel Mathematical Competition

Name: Ibrahim Qosim Olamide
Institution: University of Ilorin
Course of Study: Optometry & Vision Science

A. To determine if the proposed cost of upgrading Kwara Hotel to a 5-star hotel is expensive or cheap, we need to calculate the adjusted cost based on the inflation rate.

The inflation rate is 29%, so we can calculate the adjusted cost using the formula:

Adjusted cost = Original cost * (1 + inflation rate)

The original cost of upgrading Kwara Hotel to a 5-star hotel is N17.8 billion. Plugging in the values, we get:

Adjusted cost = N17.8 billion * (1 + 0.29)
Adjusted cost = N17.8 billion * 1.29
Adjusted cost = N22.962 billion

Since the adjusted cost of upgrading Kwara Hotel is higher than the proposed cost, we can say that the proposed cost is relatively cheap.

B. To determine the valuation of Kwara Hotel after it is fully upgraded in 2025, we need to account for the inflation rate for two years.

Using the same formula as above, we can calculate the adjusted valuation:

Adjusted valuation = Original valuation * (1 + inflation rate)

The original valuation of Kwara Hotel is N5.4 billion. Plugging in the values, we get:

Adjusted valuation = N5.4 billion * (1 + 0.29)
Adjusted valuation = N5.4 billion * 1.29
Adjusted valuation = N6.966 billion

Therefore, the valuation of Kwara Hotel after it is fully upgraded in 2025 would be approximately N6.966 billion.

C. To compare the negotiating ability of Kwara State government with Oyo State government and Akwa Ibom State government, we can consider the cost of the hotel projects and their respective valuations.

In terms of cost, Kwara State government is investing N17.8 billion to upgrade the 172-room Kwara Hotel to a 5-star hotel. Oyo State government is upgrading an 87-room Premier Hotel in Ibadan for N20 billion. Akwa Ibom State government built a 143-room 3-star hotel in Uyo for N25 billion.

Based on cost alone, Kwara State government’s negotiating ability seems to be more efficient compared to Oyo State government and Akwa Ibom State government.

However, to have a comprehensive understanding of the negotiating ability, other factors such as quality, location, and market demand should also be considered.