Question 4: Based on the information provided, determine which machine should purchased? Fill in the blanks in the table below and answer the question at the bottom Machine A Machine B Cash Cost New Equipment Purchase Cost $50,000.00 $42,300.00 Estimated Life 4 years 4 years Residual Value $21,000.00 $17,580.00 Annual Depreciation Savings, Wages of Staff $18,000.00 $18,000.00 Expenses Maintenance Supplies Depreciation Total Expenses $1,230.00 $1,000.00 $1,450.00 $1,100.00 ? Net Savings (before income tax) Income Tax (30%) Net Annual Savings + Machine A Machine B ? What is the average investment? What is the Accounting Rate of Return? (Rounded to the nearest whole number) What is the payback period? (Rounded to the nearest hundredth place) Which machine should be purchased? Total Marks (19 points) Question 5: With data from the five hotels provided below, conduct a supply and demand analysis. A Calculate the current nightly demand and the average occupancy for the five hotels. Hotel Average Rooms in Hotel Average Occupancy 80% Current Nightly Demand A 1550 P 25 125 85 P C TO D 195 P ? E 85% 90% 105 Total 12 What is the average occupancy for the five hotels? (rounded to the nearest hundredth place) Total Marks (8 Points) P B. Calculate the composite growth for each source of travellers and the total rate. Rounded to the nearest hundredth place. Annual Compound Growth 890 Composite Growth Source Business Travellers Convention Delegates Vacationers Total Total Marks (4 Points) Source of Demand 2596 35% 40% DOS 6% 48 P 2 c. Apply the composite growth rate to the demand figures to obtain projected demand for each of the next 5 years. Rounded to the nearest whole number for Composite Demand and Rooms Demand; and rounded to the nearest hundredth place for Future Growth Year Composite Demand Future Growth Rooms Demand 1 2 3 ? 2 7 Total Marks (15 Points) FINA 69 - Assignment 3 D. Assume that a 70% average room occupancy for the hotels would be profitable. Calculate the future supply of rooms that could be supported for each of the next 5 years. Rooms Normal Supply New Rooms Year Demand Occupancy Required Current Supply Required Current 2 70% ? 2 1 70% 2 7096 ? 3 70% 2 4 70% 5 70% 7 Total Marks (24 Points) 2 2