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A small local motel provided you with the following information: (A) The owners' investment in the motel is currently $250,000 (B) Desired after tax profit
A small local motel provided you with the following information: (A) The owners' investment in the motel is currently $250,000 (B) Desired after tax profit on the owners investment 12.5% (C) The motel's tax rate is 30% (D) Current mortgage amount owing is $450,000 (E) The building's present net book value is $320,000 (F) Annual depreciation on the building is 12% (G) Furniture and equipment present book value is $90,000 (H) Annual depreciation on furniture and equipment is 10% (U) Other fixed costs total $52,000 (J) Manager's annual salary is $65,000 (K) Variable costs per occupied room - as a % of sales 28% (L) Annual interest expense rate payable on the mortgage is 8% (M) Rooms available per day 30 (N) Estimated occupancy for next year 80% (0) Operating days opened (closed Christmas) 364 REQUIRED: "Calculate the Average Room Rate required to achieve the profit objective. "Created a legend of key monetary items "Provide a schedule of fixed costs Provide your answer in Contribution Margin Format
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