Serial Case C12-63 (Managerial accounting fifth edition)

This case is in continuation of the caesar's cooperation entertainment serial case that began in chapter 1. Refer to the introductory story in chapter one (see page 43) for additional background. Below are bacgound information from previous questions

1. In number of years, what is the payback period of the renovation? Ignore the maintenance costs in the seventh and twelfth years for the purpose of the payback calculation. 2. What is the net present value (NPV) of this investment? Assume an interest rate of 10%. 3. What qualitative factors did Caesarss management likely consider when making the decision to renovate the hotel?

The Master Budget 57 Serial Case C9-73 Calculate breakeven and margin of safety after hotel renovation (Learning Objective 2) This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1. Refer to the introductory story in Chapter 1 (see page 43) for additional back- ground. (The components of the Caesars serial case can be completed in any order.) Caesars Palace Las Vegas will use budgets to make its financial plans. Let's assume that Caesars prepares budgets for each of its hotel towers, including the new Julius Tower. Here is a list of budgeting assumptions10 for the Julius Tower for 2016: Data table for Julius Tower budget assumptions Number of hotel rooms in the Julius Tower 587 91.2% Average occupancy rate for Caesars Entertainment Corporation Average hotel room rate per night Total budgeted fixed costs for the Julius Tower Variable cost per Julius Tower room night s 149 $ 2,390,000 27 Requirements 1. How many Julius Tower hotel room nights should be budgeted to be booked in 2016? (Remember that 2016 is a leap year and, therefore, has an extra calendar day or 366 days.) 2. What would be the budgeted net revenue from the Julius Tower hotel rooms in 2016 3. What would be the budgeted variable costs for the Julius Tower hotel in 2016? 4. Prepare a budget for 2016 for the Julius Tower using the assumptions provided above and the numbers you have calculated. Does it appear that the Julius Tower will be generating a healthy amount of income for Caesars Palace Las Vegas? Explain The Master Budget 57 Serial Case C9-73 Calculate breakeven and margin of safety after hotel renovation (Learning Objective 2) This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1. Refer to the introductory story in Chapter 1 (see page 43) for additional back- ground. (The components of the Caesars serial case can be completed in any order.) Caesars Palace Las Vegas will use budgets to make its financial plans. Let's assume that Caesars prepares budgets for each of its hotel towers, including the new Julius Tower. Here is a list of budgeting assumptions10 for the Julius Tower for 2016: Data table for Julius Tower budget assumptions Number of hotel rooms in the Julius Tower 587 91.2% Average occupancy rate for Caesars Entertainment Corporation Average hotel room rate per night Total budgeted fixed costs for the Julius Tower Variable cost per Julius Tower room night s 149 $ 2,390,000 27 Requirements 1. How many Julius Tower hotel room nights should be budgeted to be booked in 2016? (Remember that 2016 is a leap year and, therefore, has an extra calendar day or 366 days.) 2. What would be the budgeted net revenue from the Julius Tower hotel rooms in 2016 3. What would be the budgeted variable costs for the Julius Tower hotel in 2016? 4. Prepare a budget for 2016 for the Julius Tower using the assumptions provided above and the numbers you have calculated. Does it appear that the Julius Tower will be generating a healthy amount of income for Caesars Palace Las Vegas? Explain