P6.2.a

Calculate the ROI.

P6.2.a

Calculate the Income tax.

P6.2.a

Calculate the Other income.

P6.2.a

Calculate the Annual rooms sold.

P6.2.a

Calculate the ADR (round to two decimal points)

P6.2 A 25-room budget motel expects its occupancy next year to be 80%. The owners' investment is $402,800. They want an after-tax return on their 276 PROBLEMS 291 is $806,400. investment of 15%. Tax rate is 25%. Interest on a long-term mortgage is 10%. Present balance outstanding Depreciation rate on the building is 10% of the present book value of $700,200. Depreciation on the furnishings and equipment is at 20% of the consolidated present book value of $150,400. Other known fixed costs total $141,800 a year. At 80% occupancy rate the motel's operating expenses, wages, sup- plies, and laundry, etc. are calculated to be $55,400 a year. The motel has other income from vending machines of $5,210 a year. a. To cover all costs and produce the required net income after tax, what should the motel's average room rate be next year? b. If the motel operates at 30% double occupancy and has an $8.00 spread between its single and double rates, what will the single and double room rates be? Assume only one common room size, all with the same rates. P6.3 A restaurant has 90 seats. Total annual sales revenue for next year is pro- jected to be $975,000. The restaurant is open 52 weeks a year and serves breakfast and lunch 6 days a week. Dinner is served 7 days a week. Seat turnover per day is anticipated to be 1.2 times for breakfast, 1.25 times for lunch, and 1.20 times for dinner. Sales revenue is derived at 20% from breakfast, 30% from lunch, and 50% from dinner. Calculate the restau- rant's average check by meal period. P6.4 A 140-seat dining room had a weekly customer count by meal period and so day: Lunch Dinner Sunday Monday Tuesday Wednesday Thursday Friday Saturday Closed 160 170 175 160 180 50 180 110 112 108 120 210 250 a. For each meal period and for each day of the week calculate the seat turnover. b. Calculate the average number of customers per day and the average seat turnover for the week for each meal period