As part of their application for a loan to buy Lakeside Farm, a property they hope to develop as a bed-and-breakfast operation, the prospective owners have projected: Monthly fixed cost (loan payment, taxes, insurance, maintenance) $6000 Variable cost per occupied room per night $ 20 Revenue per occupied room per night $ 75
a. Write the expression for total cost per month. Assume 30 days per month.
b. Write the expression for total revenue per month.
c.If there are 12 guest rooms available, can they break even? What percentage of rooms would need to be occupied, on average, to break even?
a. C(x) = 6000 + 20(30)x (monthly)
b. R(x) = 75(30)x (monthly)
c. Break-even occupancy = 3.64 or 4 occupied rooms per night, so they have enough rooms to break even. This would be a 33% occupancy rate.
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Answer the following statement true (T) or false (F)
A company's manager estimates that in the upcoming year, decreasing advertising costs by $50,000 will cause sales revenue to decrease by $120,000. If the company's contribution margin ratio is 35%, what will be overall effect on net operating income?
A) Net operating income will increase by $8,000. B) Net operating income will decrease by $8,000. C) Net operating income will increase by $24,500. D) Net operating income will decrease by $24,500.
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A) Criminal act and resultant harm. B) Criminal act and damages. C) Criminal act and criminal intent. D) Criminal act and physical injury. E) Criminal act and at least one impartial witness.
Firms HD and LD are identical except for their use of debt and the interest rates they pay--HD has more debt and thus must pay a higher interest rate. Based on the data given below, how much higher or lower will HD's ROE be versus that of LD, i.e., what is ROEHD - ROELD? Do not round your intermediate calculations. Applicable to Both Firms Firm HD's Data Firm LD's DataCapital$3,000,000 wd70% wd20%EBIT$595,000 Int. rate12% Int. rate10%Tax rate35% ?
A. 11.31% B. 13.37% C. 8.74% D. 10.28% E. 10.80%