P3.6 A motel had the following annual sales revenue and average room rate fig- ures for the last five years. During this five-year period there were no

changes in the number or type of rooms available and the clientele re- mained basically the same.

Annual Average

Year Sales Revenue Room Rate

1 $1,401,429 $75.00

2 $1,429,367 $76.30

3 $1,480,552 $77.60

4 $1,520,700 $78.50

5 $1,553,091 $79.90

a. Prepare room rate trend numbers from the average room rates using

100% (or 100) as the base trend index number for Year 1.

b. Use the room rate index numbers identified to convert the reported an- nual historic sales revenue to current dollars.

c. After the conversion is completed, comment on the results of your analysis.