Desires to earn after-tax income-average daily rate

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The Downtowner Motel desires to earn after-tax income of $10,000 per month. Its average daily rate (ADR) is $60, and its variable costs per room sold equal $20. Its monthly fixed costs total $15,000, and its average tax rate is 20%. How many rooms must be sold over the course of the year in order to achieve the desired profit level?

a. 3,750 rooms

b. 6,250 rooms

c. 8,250 rooms

d. 9,065

Reference no: EM13754082

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