1 / 2 115% Question 1 (40 marks) The Dragonfly Inn is bed and breakfast located in the country. The Inn offer's a variety of outdoor and leisure activities for guests. Market research shows guests in prior year's enjoyed the remote location and amenities the Inn provided. Recently a new Inn has opened closer to city limits and with rising gas prices the Inn has noticed a decrease in customers. With less customers, the company has experienced a decrease in cash flows and thus had to reduce their advertising. For the new operating year, the establishment estimates a decrease revenue. The company forecasts the following hotel and restaurant revenues along with the selling and administrative costs, operating costs, estimated income taxes and cash flows: 1. The Inn has 50 rooms and is predicting the following occupancy for each quarter: a. Quarter 1 (January to March, 90 operating days), 50% occupancy, average room rate of $200 per night. b. Quarter 2 (April to June, 91 operating days), 70% occupancy, average room rate of $230 per night. c. Quarter 3 (July to September, 92 operating days), 80% occupancy, average room rate of $260 per night. d. Quarter 4 (October to December, 81 operating days, the Inn closes for the Christmas break), 75% occupancy, average room rate of $220 per night. 2. The accompanying restaurant has a capacity of 40 seats and will operate the same days as the hotel. The company estimates the following for all meals: Quarter 1 wanted with inc of Ar