Suppose a Holiday Inn Hotel Has Annual Fixed Costs Applicable

question 8

Multiple Choice

Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel.Average daily room rents are $50 per room and average variable costs are $10 for each room rented.It operates 365 days per year.If the hotel is one-half full throughout the entire year,what is the amount of net income for one year?

• A)$(1,192,500)
• B)$990,000
• C)$1,590,000
• D)$2,737,500

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