Description	The Ash Inn	The Zheng Inn
	Year Ended 12/31/16	Year Ended 12/31/16
Assets
Current Assets
Cash	$190,000	$150,000
Accounts Receivable	$200,000	$200,000
Inventories	$10,000	$50,000
Total Current Assets	$400,000	$400,000
Property and Equipment
Land	$120,000	$120,000
Building (net)	$600,000	$600,000
Furniture & Equipment (net)	$160,000	$160,000
Total Property & Equipment	$880,000	$880,000
Total Assets	$1,280,000	$1,280,000
Liabilities & Owners' Equity
Current Liabilities	$420,000	$500,000
Long-Term Liabilities
Note from Owner	$80,000	$80,000
Mortgage Payable	$160,000	$120,000
Total Liabilities	$660,000	$700,000
Owners' Equity
Common Stock	$200,000	$200,000
Retained Earnings	$420,000	$380,000
Total Owners' Equity	$620,000	$580,000
Total Liabilities & Owners' E.	$1,280,000	$1,280,000
Average Common Shares Outstanding	40,000	50,000
Condensed Income Statement
Sales (Revenues)	$3,000,000	$4,000,000
Cost of Goods Sold	$400,000	$800,000
Operating Expenses	$1,600,000	$2,000,000
Contribution Margin	$1,000,000	$1,200,000
Undistributed Operating Expense	$250,000	$370,000
Income after Undistributed Operating Expenses (Gross Operating Profit)	$750,000	$830,000
Interest	$240,000	$180,000
Other Fixed Charges	$320,000	$404,000
Income Before Taxes	$190,000	$246,000
Income Tax	$57,000	$73,800
Net Income	$133,000	$172,200
Occupancy	78.00%	70.00%
ADR	$66.25	$78.28

Mary asks us to calculate the Operating Efficiency Ratio for each property. Which management team did a better job and what is the Operating Efficiency Ratio for the better performing property?

(a)The management team at the Ash Inn did a better job and the Operating Efficiency Ratio was 25.00%.

(b)The management team at the Zheng Inn did a better job and the Operating Efficiency Ratio was 20.75%.

(c)The management team at the Ash Inn did a slightly better job and the Operating Efficiency Ratio was 4.34%.

(d)The management team at the Zheng Inn did a better job and the Operating Efficiency Ratio was 6.20%.

Lindsey asks you to calculate the RevPar for each property. Which property achieved a higher RevPar and what is the RevPar for the better performing property?

RevPar = Paid occupancy percentage X ADR

(a) The Ash Inn achieved a higher RevPar and it was $51.68.

(b)The Zheng Inn achieved a higher RevPar and it was $54.80.

(c)The Ash Inn achieved a higher RevPar and it was $74.00.

(d)The Zheng Inn achieved a higher RevPar and it was $70.00.