Case 3 - HA321 CASE #3 "The G continues." [Type...

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HA321 CASE #3 "The G continues. .." [Type your Serial Number HERE] Sheet 1 (Use "page setup" to fit sheet 1 in one page, check it with print-preview to make it look professional) Professor A. Neal Geller SHA Cornell University "THE Beta" Sheet #1 Fall 2007 Statement of Income-Single Column Format 2003 Actual 2004 Actual REVENUES: ROOMS $19,814,213 $18,974,436 $19,933,436 0.60% FOOD $7,476,149 $8,018,354 $9,225,911 23.40% BEVERAGE $2,932,485 $3,245,766 $3,090,613 5.39% TELECOMMUNICATIONS $711,787 $860,434 $875,442 22.99% $596,833 $851,760 $750,886 25.81% TOTAL REVENUES $31,531,467 $31,950,750 $33,876,288 7.44% DEPARTMENTAL COSTS AND EXPENSES: ROOMS $7,089,765 $6,700,856 $6,984,048 35.04% FOOD $5,863,831 $6,398,844 $6,534,047 70.82% BEVERAGE $1,994,300 $1,818,668 $1,865,734 60.37% TELECOMMUNICATIONS $743,651 $971,970 $885,320 101.13% $0 $0 $0 TOTAL COSTS AND EXPENSES $15,691,547 $15,890,338 $16,269,149 48.03% TOTAL OPERATED DEPARTMENTAL INCOME $15,839,920 $16,060,412 $17,607,139 51.97% UNDISTRIBUTED OPERATING EXPENSES $2,432,567 $2,593,668 $2,357,752 6.96% MARKETING $2,499,991 $2,337,526 $2,329,862 6.88% PROPERTY OPERATION AND MAINTENANCE $1,655,644 $1,581,888 $1,573,002 4.64% UTILITY COSTS $2,579,114 $2,968,694 $2,398,258 7.08% $9,167,316 $9,481,776 $8,658,874 25.56% $6,672,604 $6,578,636 $8,948,265 26.41% RENT, PROPERTY TAXES AND INSURANCE $2,734,247 $2,620,244 $2,765,116 8.16% $3,938,357 $3,958,392 $6,183,149 18.25% INTEREST EXPENSE $1,945,230 $1,819,764 $1,945,388 5.74% $1,993,127 $2,138,628 $4,237,761 12.51% DEPRECIATION AND AMORTIZATION $2,500,854 $2,206,000 $2,307,645 6.81% GAIN (LOSS) ON SALE OF PROPERTY ($1,098) $0 $4,296 INCOME BEFORE INCOME TAXES ($508,825) ($67,372) $1,934,412 5.71% INCOME TAXES $0 $0 $773,765 NET INCOME (LOSS) ($508,825) ($67,372) $1,160,647 3.43% *********************** Q1-1 What could be the vaule of property using VT1: Band of Investment Using "2003 Actual" as One Stabilized Year? Mortgage Finance Terms: 1.Mortgage Interest Rate: 0.08 Weighted Average cost of capital calculation 2.Mortgate Amortization (in year) 25 % of Value Rate pf return WA 3.Mortgate Constant 0.09 Mortgate 70% 0.09 0.06 4.Loan to Vaue Ratio: 70% Equity 70% 0.12 0.09 5.Equity dividend rate (before tax) 0.12 Sum = 0.15 Use the figure of "income Before Depreciation Amortization and Income Taxes" for B53 (*Estimate CapEx as the same amount as Int Ex) $1,993,127 divide by WACC= 13,390,414 Q1-2 What could be the vaule of property using VT1: Band of Investment Using "2004 Actual" as One Stabilized Year? 1.Mortgage Interest Rate: 0.08 Weighted Average cost of capital calculation 2.Mortgage Amortization (in year) 25 % of Value Rate pf return WA 3.Mortgage Constant 0.09 Mortgate 70% 0.090639 0.06345 4.Loan to Vaue Ratio: 70% Equity 70% 0.122000 0.08540 5.Equity dividend rate (before tax) 0.12 Sum = 0.15 (You may assume all the other variables being equal) Use the figure of "income Before Depreciation Amortization and Income Taxes" for B63
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Case 3 - HA321 CASE #3 "The G continues." [Type...

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