Reference no: EM131789734
Assignment
A restaurant with 100 seats, serving both lunch and dinner 6 days per week, reported total annual sales revenue of $998,000. Dinner generates 68% of total sales revenue, with a seat turnover of 1.75. What is the average check for dinner?
a. $12.43 b. $18.28 c. $646.32 d. $950.48
2. Determine the operating income necessary to yield net income of $56,000 using a current tax rate of 30%.
a. $80,000 b. $186,667 c. $92,857 d. $216,667
3. A small motel operation with 50 rooms has an average yearly occupancy rate of 74%. The forecasted sales revenue for the coming year is $842,712. What is the average room rate expected to be?
a. $19 b. $23 c. $62 d. $228
(Questions 4 - 10) A motel has 30 rooms and expected 70% occupancy next year. The owners' investment is presently $520,000, and they expect a 12% after-tax annual return on their investment. The motel is in a 24% tax bracket. The motel is carrying two mortgages: the first mortgage in the amount of $359,000 at a 10% interest rate and the second mortgage in the amount of $140,000 at a 14% interest rate. Current book value of the building is $632,000, and depreciation rate is 5%. Present combined book value of furniture and equipment is $117,000, and the combined depreciation rate is 20%. Indirect costs are $44,800 and direct costs are $59,300. The motel also receives an additional $12,000 a year leasing out its restaurant.
4. What is a net income required (return on investment)?
a. $6,240 b. $12,480 c. $62,400
5. What is the operating income to cover the net income required?
a. $70,909 b. $82,105 c. $164,210
6. What is the amount of total costs and expenses?
a. $104,100 b. $110,500 c. $202,600
d. $124,800 d. $260,000 d. $214,600
7. What is the sales revenue required to cover all expenses and costs and to provide the owners with their desired return on investment?
a. $272,705 b. $284,705 c. $296,705 d. Can't determine
8. In order to generate the sales revenue required from Question 7, what is the required average room rate?
a. $30 b. $37 c. $42 d. $55
9. Assuming a 60% double occupancy and a $12 difference between singles and doubles, what is the average single room rate?
a. $30 b. $37 c. $42 d. $55
10. Assuming a 60% double occupancy and a $12 difference between singles and doubles, what is the average double room rate?
a. $30 b. $37 c. $42 d. $55