Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the lean inn, a 50 room lodging only facility, is

The Lean Inn, a 50 room lodging only facility, is being planned by its owner...

60.1K

Verified Solution

Question

Accounting

image
The Lean Inn, a 50 room lodging only facility, is being planned by its owner Jack Sprat and his wife, who is concerned about its feasibility. He has provided you with the following information. 1) Proposed cost of facility: Land $400,000 Building $2,000,000 Equipment $1,000,000 2) He is planning to finance the facility by investing $1,000,000 of his own funds and borrowing $2, 400,000 as a mortgage at an annual interest rate of 8%. 3) He has a desired ROI of 15% 4) His income tax rate is 40%. Required: 1) Calculate the net income after-tax. 2) Determine the Inn's tax income tax amount 3) Find the net income before tax of the Lean Inn. 4) Determine the amount of annual interest that will have to be paid. (Should be done utilizing the Hubbart Formula.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students