The Dragonfly Inn is bed and breakfast located in the country. The Inn offer's a variety of outdoor and leisure activities for guests. Market research shows guests in prior year's enjoyed the remote location and amenities the Inn provided. Recently a new Inn has opened closer to city limits and with rising gas prices the Inn has noticed a decrease in customers. With less customers, the company has experienced a decrease in cash flows and thus had to reduce their advertising. For the new operating year, the establishment estimates a decrease revenue. The company forecasts the following hotel and restaurant revenues along with the selling and administrative costs, operating costs, estimated income taxes and cash flows: 1. The Inn has 50 rooms and is predicting the following occupancy for each quarter: a. Quarter 1 (January to March, 90 operating days), 50% occupancy, average room rate of $200 per night. b. Quarter 2 (April to June, 91 operating days), 70% occupancy, average room rate of $230 per night. c. Quarter 3 (July to September, 92 operating days), 80% occupancy, average room rate of $260 per night. d. Quarter 4 (October to December, 81 operating days, the Inn closes for the Christmas break), 75% occupancy, average room rate of $220 per night. 2. The accompanying restaurant has a capacity of 40 seats and will operate the same days as the hotel. The company estimates the following for all meals: a. Quarter 1-A turnover of 3 is expected with an average meal price of $15. b. Quarter 2-A turnover of 5 is expected with an average meal price of $18. c. Quarter 3-A turnover of 7 is expected with an average meal price of $21. d. Quarter 4-A turnover of 6 is expected with an average meal price of $19. 3. Quarter 1 and Quarter 4, Selling and administrative expenses are estimated to be $250,000 a. Quarter 2 selling and administrative expenses are estimated to be 10% higher than Quarter 1. b. Quarter 3 selling and administrative expenses are estimated to be 5% higher than Quarter 2. 4. Operating expenses are estimated to be $2,600,000 for the year. 5. Income taxes are estimated to be 25% of income before taxes. 6. The company has a beginning balance of $15,000. Cash collections from customers are estimated to be 85% of the sales revenues. The Inn is also expecting to sell some of the furnishings for $10,000. E