A motel had the following annual sales revenue and average room rate figures for the last five years. During this five-year period there were no changes in the number or type of rooms available and the clientele remained basically the same.

a. Prepare room rate trend numbers from the average room rates using 100% (or 100) as the base trend index number for Year 1.

b. Use the room rate index numbers identified to convert the reported annual historic sales revenue to current dollars.

c. After the conversion is completed, comment on the results of your analysis.LO1

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Annual Year Sales Revenue Average Room Rate 12345 $1,401,429 $75.00 2 $1,429,367 $76.30 3 $1,480,552 $77.60 4 $1,520,700 $78.50 5 $1,553,091 $79.90