Define the return on invested capital as the ratio of profit

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Reference no: EM132108496

MySunshine Hotel is a chain with 9 identical hotels which operate 365 days a year. The chain invested $200M to purchase land for these hotels and $100M to build and furnish them. Each hotel has177 rooms and charges and average price of 168 per night. Each operating material cost for each hotel is $1M. On top of that, each hotel is staffed with 48 employees; each paid $50,000 a year on average. The number of hotel employees has a direct effect on hotel occupancy in the following way: Hotel occupancy rate=0.01 X Number of Employees

Define the return on invested capital as the ratio of the profits (PER YEAR) and the invested capital. What is the ROIC? (Please keep 4 decimal places, not in percentage)

Reference no: EM132108496

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