A resort hotel has total annual sales revenue of $1,000,000, variable costs of $350,000, and fixed costs of $570,000. The fixed costs include $80,000 a year for land rental lease.

a. Calculate the hotels breakeven point.

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b. If the owners had an equity investment in the hotel of $1,200,000, what level of sales revenue is required for an operating income (BT) representing a 15% return on their investment?

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