1. A hotel has 250 rooms available for sale. Last year the hotel sold 73,000 rooms, and...

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1. A hotel has 250 rooms available for sale. Last year the hotel sold 73,000 rooms, and had $8,760,000 rooms revenue.
a. What was the hotel’s occupancy percentage last year?
b. What was the hotel’s ADR last year?
c. What was the hotel’s RevPAR last year?

2. Last night a hotel achieved an ADR of $220.00 and total rooms revenue of $66,000. The hotel has 400 rooms available for sale. What was the hotel’s occupancy percentage last night?

3. A restaurant has 80 seats and opens for dinner 6 days a week, 5 hours per evening. If the restaurant’s annual revenue is $870,000, and the seat turnover of this restaurant is 2.5, how much is its average check?

4. A 100-room motel has an average room rate of $95. Its fixed costs are $359,924 a year, and its variable costs total $467,200 at an average occupancy of 80%.
What is the motel’s breakeven occupancy percentage?
What level of sales revenue is required to provide an operating income of $100,000?What occupancy percentage is required to have operating income of $100,000?

5. Tanya owns a coffee shop. On average, for every sales of large coffee she sells 4 small coffees. Sales price of small coffee is $1.50 and for large coffee is $2.30.

The average variable expense of making one small coffee is $0.80 and for one large coffee is $1.10. Tanya’s coffee shop has a fixed monthly expense of $780.

a. Find the Break-Even units and Break-Even sales for a month.

b. How many units of each coffee size should Tanya sell to have an operating income of $2,340 for the month?

6. Julia's Catering has a monthly target operating income of $6,000. Variable expenses are 40% of sales and monthly fixed expenses are $3,600.
a. What is the monthly margin of safety in dollars if Julia's Catering achieves its' operating income goal?
b. What is the monthly margin of safety as a percentage of target sales in dollars at Julia's Catering?
c. What is Julia's operating leverage factor at the target level of operating income?

7. A coffee shop sells each coffee for average $2.50. Each coffee has an average variable cost of $1.20. The monthly fixed cost is $13,000 and they sell around 15,000 coffees per month.
a. Find the Monthly Sales revenue.
b. Find the monthly Operating Income.

8. You purchase an apartment for $500,000; 20% down payment and 80% mortgage with 3.6% annual interest rate. You rent the place for $2,400 per month. Your monthly expenses are strata fee: $360, repair and maintenance: $140, Insurance: $100. You also pay $1,800 for one-year property tax.
How much is the ROI for your investment?

9. Melissa has estimated that for the next 10 years her business will experience a net annual cash inflow of $60,000. Based solely on the cash flows for the next 10 years, how much does the business worth today? Assume an expected rate of 7%.

10. A business would like to buy a large piece of equipment that will improve their cash flow over the next ten years by $30,000 annually. If the company's expected rate is 14% and they expect no residual value at the end of the period, how much should the company be willing to pay for the equipment?

11. You borrow $200,000 with annual interest rate of 3% compounded monthly. The loan amortization is 20 years and you will pay back the loan with equal monthly payments, which includes both the principle and the interest of the loan.

a. How much will the monthly payments be?

b. How much will you pay for interest in 20 years?

12. A business manager is evaluating the purchase of a new machine to use in its manufacturing process. The new machine would cost $40,000 and have a useful life of 6 years. At the end of the machine's life, it would have a residual value of $2,500. Annual cost savings from the new machine would be $12,400 per year for each of the six years of its life. The business has a minimum required rate of return of 16% on all new projects. How much is the net present value of the new machine?

13. A Corporation is considering investing in specialized equipment costing $240,000. The equipment has a useful life of 5 years and a residual value of $20,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are: