Suppose a Hotel Has Annual Fixed Costs Applicable to Its

question 59

Multiple Choice

Suppose a hotel has annual fixed costs applicable to its rooms of $2.0 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 completely full throughout the year,what is net income for one year?

• A) $1,280,000
• B) $2,380,000
• C) $3,180,000
• D) $4,380,000

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