Determine the projected net income

Assignment Help Finance Basics

Reference no: EM1359882

Goran Blomberg is interested in investing in a new rooms-only lodging property. He needs some financial projections for the proposed operations. He provides the following:

1. Room sales
Average room rate $50
Average daily occupancy 65%
Average rooms per day 50

2. Fixed labor- $12000/month

3. Other fixed expenses
Depreciation $5000/month
utilities $3000/month
Insurance $1000/month
Other $3000/month

4. Variable labor- 15%

5. Other variable expenses
Other room expenses 5%
Administration 4%
Marketing 5%
Utilities 3%
Other 8%
6. Income tax rate- 20%

Q.
1. Determine the projected net income using the above information. Assume the property will be open 365 days a year.
2. Determine the projected net income if the room rate is increased to $55.
3. Independent of #2, determine the projected net income if the room rate is increased to $60 and variable labor is %18.

Reference no: EM1359882

Questions Cloud

Stakeholders and management decisions : What would you say are the degrees of power in analyzing stakeholders and which stakeholder usually holds the greatest amount of power and the least amount and why?

Roles of emotion and fairness in decision making : Summarize the role of decision making in business and explain the roles of emotion and fairness in decision making.

Find electromagnetic energy incident from the satellite : How large does the radius R of the dish have to be to achieve an electric field vector amplitude of 0.1 rm mV/m at the receiver.

Basic concepts of classic theorists : Identify one of the classic theorists, (Freud, Adler or Jung) that most appeals to you and outline the basic concepts of their theory. Construct a 250-300 word post including the following points.

Determine the projected net income : Goran Blomberg is interested in investing in a new rooms only lodging property. He requires some financial projections for the proposed operations. He provides the following information

Why do businesspeople keep making the same mistake : Explain what happened to Nortel is similar to what happened to WorldCom and Enron in the early 2000s, and to Lehman Brothers,

Find the initial velocity of the ball : find the initial velocity of the ball. An echo is heard in 3 sec after the emission of sound. If speed of sound in air is 342 m/s, what is the distance of the reflecting surface from the source.

Personal time management evaluation : Personal Time Management Evaluation - Find your priorities and explore your time management skills, write a two page self-reflection paper on what you have learned about yourself.

Psychology-contribution to the legal system : An analysis of how psychology in general has contributed to the legal system. Two specific examples and their impact such as rehabilitation services and ethical/moral decisions.

User Account

All Pages