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