# word problems

Anonymous

Question description

Problem 1. Gerard has been successfully operating a bed and breakfast in South Carolina from his home in Atlanta. Based on the recurring income he receives from that property, he’s decided to expand his work in the hospitality industry. Although he wants to open a luxury boutique hotel in the trendy part of Atlanta, he’s instead decided to work with Annisa to purchase a 25-room budget motel.

Based on historical records, Gerard and Annisa expect its occupancy next year to be 80%. Their owners’ investment is \$402,800. They want an after-tax return on their investment of 15%. Tax rate is 25%.

• Interest on a long-term mortgage is 10%. Present balance outstanding is \$806,400.
• Depreciation rate on the building is 10% of the present book value of \$700,200. Depreciation on the furnishings and equipment is at 20% of the consolidated present book value of \$150,400
• Other known fixes costs total \$141,800 a year
• At 80% occupancy rate, the mote’s operating expenses, wages, supplies, and laundry are calculated to be \$55,400 a year
• The motel has other income from vending machines of \$5,210 a year
1. To cover all costs and produce the required net income after tax, what should the motel’s average room rate be next year?
2. If the motel operates at 30% double occupancy and has an \$8.00 spread between its single and double rates, what will single and double room rates be? Assume only one common room size, all with the same rates.

Problem 2. Tiayana and Maria met at CityTech years ago, and now own a 140-seat dining room, featuring new American cuisine. It’s the hottest place in Brooklyn. Tiayna and Maria, but much of their success is because they keep close tabs on the restaurant’s financials. Right now, they’re calculating the seat turnover and the number of customers per day, etc.

 Lunch Dinner Sunday Closed 180 Monday 160 110 Tuesday 170 110 Wednesday 175 112 Thursday 160 180 Friday 180 210 Saturday 50 250
1. For each meal period and for each day of the week calculate the seat turnover.
2. Calculate the average number of customers per day and the average seat turnover for the week for each meal period.
3. List some of the ways in which the information in parts A and B would be useful to them.

(Top Tutor) Studypool Tutor
School: University of Virginia
Studypool has helped 1,244,100 students
flag Report DMCA

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors