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Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel, average daily room rents of
Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel, average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365 days per year. The amount of operating income on rooms, assuming an occupancy* rate of 80% for the year, that will be generated for the entire year is _____. *occupancy = % of rooms rented
A. $(1,188,000) B. $4,380,000 C. $3,180,000 D. $2,304,000
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