Suppose a Holiday Inn Hotel Has Annual Fixed Costs Applicable

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 of $50, and average variable costs of $10 for each room rented.It operates 365 days per year.The amount of net income on rooms that will be generated if the hotel is half full throughout the entire year is _____.

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