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1. Caesars Palace Las Vegas opened in 1966. It is the twelfth largest hotel in the world. Caesars Palace Las Vegas, at the start of

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1. Caesars Palace Las Vegas opened in 1966. It is the twelfth largest hotel in the world. Caesars Palace Las Vegas, at the start of 2015, included six towers containing almost 4,000 guest rooms. Following is a table listing condensed revenue and expense gures for Caesars Entertainment Corporation for the years ending December 31, 2012 through 2014. 2014 2013 2012 Food and beverage expenses $694 $639 $634 Rooms revenues 1,207 1,167 1,147 Casino expenses 3,253 3,112 3,368 Food and beverage revenue 1,522 1,451 1,438 Rooms expenses 315 296 289 Casino revenue 5,418 5,529 5,916 Which department generated the lowest income in 2014? a. Casino b. There is not enough information C. Rooms d. Food and beverage This department was also the lowest income in 2013 and 2012. a. True b. False 2. Caesars Palace made headlines when it undertook a $75 million renovation in mid-September 2015. In January 1, 2016, the newly renamed Julius Tower reopened, replacing the Roman Tower. In addition, 20 guest rooms were added to the tower which means the volume of rooms booked during the year is expected to be 195,000 rooms. Caesars expects the Julius Tower room rate to average around $145 per night. This increase, a $25 or 20.2% increase, reects, in part, the room improvements. Assume that the annual xed operating costs for the Julius Tower in Caesars Palace Las Vegas will be $5,000,000. This amount represents an increase of $200,000 per year compared to pre- renovation. Also assume that the variable cost per hotel room night after the renovation is $25; before the renovation, the variable cost per room night was $20. The contribution margin after the renovation is: a. $120 b. $106 C. $124 d. $45 The break-even room nights for the new Julius Tower after renovation : Fixed Costs / CM is: a. 43,333 b. 47,170 C. 41,668 d. 40.984 3. Caesars Entertainment Corporation (CEC) has several properties in Las Vegas, Nevada, which it owns or manages. The following list of selected property-related data is taken from CEC's 2014 Form 10-K, Item Caesars Entertainment Corporation Data from Form 10K, Item 2 As of December 31, 2014 Property Casino Space-Square Slot Table Hotel feet Machines Games Rooms Flamingo Las Vegas 72,300 1, 110 120 3,460 Harrah's Las Vegas 90,600 1,280 90 2,720 Paris Las Vegas 95,300 1,020 100 2,920 Rio All-Suites Hotel & 117,300 1,070 90 2,520 Casino Bally's Las Vegas 66,200 1.000 70 2,810 The Cromwell 28,100 450 60 188 Planet Hollywood 64,500 1,100 90 2,500 The LINQ Hotel & Casino 62,200 750 70 2,922 Caesars Palace Las Vegas 123,700 1,300 170 3,960 Totals 720,200 9,080 860 24,000 Cost accounting managers want you to calculate a cost activity pool rate that can be used to allocate the costs of the housekeepers to different facilities. To do this, you need to select an activity measure to be the denominator in your calculations. Which of the following is the best choice to allocate the costs of the housekeepers? a. Table games 6. Casino space-square footage C. Slot machines d. Number of hotel rooms and suites4. Caesars PalaceR Las Vegas will use budgets to make its financial plans. Let's assume that Caesars prepares budgets for each of its hotel towers, including the new Julius Tower. Here is a list of budgeting assumptions for the Julius Tower for 2016: Data table for Julius Tower budget assumptions: Number of hotel rooms can be booked in the Julius Tower during the 366 days of 2016 214,000 Average occupancy rate for Caesars Entertainment Corporation 90% Average hotel room rate per night $ 149 Total budgeted fixed costs for the Julius Tower $ 2,000,000 Variable cost per Julius Tower room night $ 20 After completing a contribution margin income statement, the bottom-line is: a. $22,417,400 b. $26,034,000 C. $22,845,400 $25,606,000 5 . Caesars Entertainment Corporation Consolidated Statements of Cash Flows (condensed and adapted) in millions Year Ended December 31, 2014 2013 2012 Cash flows from operating activities Net loss $ ( 2 , 866 ) $ (2,940) $ (1,503 djustments to reconcile cash flows 2,131 2,841 1,536 Cash flows from operating activities ( 735 ) (99 33 Cash flows from investing activities Acquisitions of property and equipment (998) (726) (507) Other investing activities 309 791 (718) Cash flows from investing activities ( 689) (1,225) Cash flows from financing activities Proceeds from inssuance of long-term debt 4,436 6,039 4,162 Repayments of long-term debt (2,833) (6,605) (2, 661 ) Other financing activities (89) 1.217 (28) Cash flows from financing activities 1,514 651 1,473 Net cash flows from operating, investing, 90 617 281 and financing Other adjustments to cash (55) 396 586 Net increase (decrease) in cash and cash equivalents 35 1.013 867 Cash and cash equivalents, beginning of period 2,771 1,758 891 Cash and cash equivalents, end of period $ 2,806 $ 2,771 $ 1,758 Looking at the statements of cash flows above, which activity has generated the most cash for Caesars? a. Investing Activities b. Financing Activities C. Operating Activities d. None of the above How would the costs of renovation on the Julius Tower be reported on a statement of cash flows? An increase in investing activities b. An increase in financing activities c. A decrease in investing activities d. A decrease in financing activitiesCaesars Entertainment Corporation Consolidated Statements of Operations (condensed and adapted) LAWN D In millions, except per share data Years Ended December 31, 2014 2013 2012 Net revenues 8,516 $ 8,220 $ 8,186 7 Operating expenses 8,968 0,246 3.052 8 Income (loss) from operations (452) (2,026) 134 9 Interest expense (2,670) (2,252) (2,100) 10 Other gains (losses) (95 ) 28 162 11 Loss from continuing operations before taxes 3,217) 4,250) (1,804) 12 Income tax benefit 543 1,517 701 13 Loss from continuing operations, net of taxes 2,674) (2,733) 1,103) 14 Other items (109) (215) (405) 15 Net loss (2,783) $ 2,948) $ 1,508) 16 Caesars Entertainment Corporation Consolidated Balance Sheets (condensed and adapted) In millions As of December 31, 2014 2013 Assets Current Assets Cash and cash equivalents $ 2,806 $ 2,771 Restricted cash 76 88 10 Receivables, net 518 620 11 Prepayments and other current assets 230 246 12 Inventories 43 45 13 Total current assets 3,673 3,770 14 Property and equipment, net 13,456 13,238 15 Goodwill and other intangible assets 5,516 6,551 16 Other long-term assets 890 1,130 17 Total assets $ 23,535 $ 24,689 18 19 Liabilities and stockholders' equity 20 Current liabilities 21 Accounts payable $ 349 $ 443 22 Accrued expenses 1,199 212 23 Interest payable 736 390 24 Other current liabilities 15,996 486 25 Total current liabilities 18,280 2,531 26 Long-term debt 7,434 20,918 27 Other long-term liabilities 2,563 3,144 28 Total liabilities 28,277 26,593 29 Stockholders' equity (deficit) 30 Common stock 31 Treasury stock (19 (16) 32 Additional paid-in capital 8,140 7,231 33 Retained earnings (accumulated deficit) 13,104) 10,321) 34 Other stockholders' equity items 240 1,201 35 Total stockholders equity (deficit) (4,742) (1,904) 36 Total liabilities and stockholders equity 23,535 $ 24,689Caesar's net working capital for 2014 is a. .20 b. -14,607 c. 1,239 d. 1.49 Based on Caesar's net working capital, which of the following is a true statement? Caesar's Palace has a negative working capital, which indicates that they have more debts coming due in the current year than they have liquid assets to pay them. Caesar's Palace has a positive working capital, which means they have plenty of liquid assets to pay their debts coming due in the current year. Caesar's Palace has a positive working capital, which means their total assets are greater than their total liabilities. Caesar's Palace has a negative working capital, which means their total liabilities are greater than their total assets. Calculate accounts receivable turnover for 2014. a. 14.5 times b. 16.4 times 0. 15 times (1. 13.7 times Based on Caesar's Palace's Time-Interest Earning Ratio, which of the following statements is false? 21. There is plenty of operating income to cover interest expense b. The times-eaming ratio measures the number of times operating income can cover interest expense. c. The time-earning ratio for Caesar's Palace is -.17 d. Caesar's Palace cannot cover any interest expense with operating income

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