Explain how many rooms the hotel must rent to achieve

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Q. A 600 room hotel has annual fixed costs applicable to rooms of $9.2 million. The average variable costs per room rented is $25. The average room rental rate is $105. The Hotel operates 365 days per year. The hotel is subject to a 40% income tax rate.

Explain how many rooms the hotel must rent to achieve a net income of $720,000 after taxes. Explain how many rooms to achieve a net income of $360,000 after tax?

Reference no: EM1377339

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