Imagine you are head of the food and beverage department in a large Los Angeles hotel...
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Imagine you are head of the food and beverage department in a large Los Angeles hotel complex. One of the hotel's restaurants currently generates an ROI of 11%, based on a value of 400,000 in total activities attributable to the restaurant itself. The percentage ebit is on average 30%. The restaurant manager believes that by reducing prices by 5%, the restaurant's profitability would increase. Currently, the average revenue per meal served is 50. a. What is the asset turnover ratio of the restaurant? (10 points) b. If the price cut is adopted, what is the new level of revenues required in order not to reduce ROI? (10 points) c. What is the corresponding number of meals to be sold? (5 points) Imagine you are head of the food and beverage department in a large Los Angeles hotel complex. One of the hotel's restaurants currently generates an ROI of 11%, based on a value of 400,000 in total activities attributable to the restaurant itself. The percentage ebit is on average 30%. The restaurant manager believes that by reducing prices by 5%, the restaurant's profitability would increase. Currently, the average revenue per meal served is 50. a. What is the asset turnover ratio of the restaurant? (10 points) b. If the price cut is adopted, what is the new level of revenues required in order not to reduce ROI? (10 points) c. What is the corresponding number of meals to be sold? (5 points)
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Answer rating: 100% (QA)
a Asset turnover ratio of the restaurant Given ROI 11 Total assets attributed to restaurant 400000 ... View the full answer
Related Book For
Foundations of Lodging Management
ISBN: 978-0132560894
2nd edition
Authors: David K. Hayes, Jack D. Ninemeier, Allisha A. Miller.
Posted Date:
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