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QUESTION 6

You are part of a group of owners who wish to invest money into a new tour business. Use the information below to calculate the required information asked of you for this question, using the Bottom-Up Pricing method.

*Note*

Only find the answer to the single question being asked of you in this question; do not complete all the Bottom-Up Pricing steps. Previous steps information is provided below to assist you.

Calculate the Net Income/After-Tax Profit required to meet the owners desired rate of return. Round to the nearest dollar.

New Equipment Value	$185788
Loan Amount	$133458
Interest Rate %	10%
Investment by Owners	$172311
Desired Rate of Return	9%
Income Tax Rate %	26%
Insurance Expense	$138901
Fixed Wages	$116976
Depreciation Rate %	11%
Food Cost %	19%
Variable Wage %	22%
Other Variable Expenses %	13%
Maximum # of Tour Guests per Tour	40
Average Occupancy % of Tours	92%
# of Tours per month	29

1 points

QUESTION 7

You are part of a group of owners who wish to invest money into a new tour business. Use the information below to calculate the required information asked of you for this question, using the Bottom-Up Pricing method.

*Note*

Only find the answer to the single question being asked of you in this question; do not complete all the Bottom-Up Pricing steps. Previous steps information is provided below to assist you.

Calculate the average selling price required to meet the owners desired rate of return. Round to the nearest dollar.

Revenue	$262442
New Equipment Value	$155146
Loan Amount	$383852
Interest Rate %	10%
Food Cost %	18%
Variable Wage %	16%
Other Variable Expenses %	11%
Maximum # of Tour Guests per Tour	40
Average Occupancy % of Tours	69%
# of Tours per month	17

1 points

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