# Essay on Border Hotel Case Calculations

1310 Words Jun 1st, 2014 6 Pages
Revenue Estimates
Revenue Item 100% Monthly 75% Monthly 50% Monthly Notes
Rooms \$2,956,500 \$2,217,375 \$1,478,250 8,100 daily
Leases \$180,000 \$135,000 \$90,000
TOTAL REVENUE \$3,136,500 \$2,352,375 \$1,568,250

Expences
TOTAL VARIABLE COSTS \$454,000 \$340,500 \$227,000
TOTAL FIXED COSTS \$1,403,000 \$1,403,001 \$1,403,002
TOTAL EXPENSE BEFORE IT \$1,857,000 \$1,743,501 \$1,630,002
EBIT \$1,279,500 \$608,874 -\$61,752 Depreciation \$320,000 \$320,001 \$320,002
EBITDA \$1,599,500 \$928,875 \$258,250 Furnishing Interest \$110,000 \$110,000 \$110,000
20yr Mortgage Interest \$182,000 \$182,000 \$182,000
TOTAL INTEREST \$292,000 \$292,000 \$292,000 TAXES (40%) \$395,000.00 \$126,749.60 -\$141,500.80
58,250 Furnishing Interest \$110,000 \$110,000 \$110,000 TOTAL INTEREST \$110,000 \$110,000 \$110,000 TAXES (40%) \$467,800.00 \$199,549.60 -\$68,700.80 Furnishing Principal \$180,160 \$180,160 \$180,160
20yr Mortgage Principal \$49,713 \$49,713 \$49,713
TOTAL PRINCIPAL \$229,873 \$229,873 \$229,873
NET INCOME \$471,827 \$69,451 -\$332,924
DIVIDEND PAYMENT \$37,746 \$5,556 -\$26,634 RETAINED EARNINGS \$434,081 \$63,895

EBIT/INTEREST 11.63 5.54 (0.56)
EBITDA/INTEREST 14.54 8.44 2.35
BURDEN \$493,121.67 \$493,121.67 \$493,121.67
EBIT/BURDEN 2.59 1.23 (0.13)
EBITDA/BURDEN 3.24 1.88 0.52
ROE= Net Income/OE (H2) 13.48% 1.98% -9.51%
ROE= Net Income/OE (H3) 27.75% 4.09% -19.58%
ASSET Proposal1 Proposal2 Proposal3 Cash \$0 \$0 \$0 Land \$975,000 \$975,000 \$975,000 Building \$2,300,000 \$2,300,000 \$2,300,000 Furnishing \$1,100,000 \$1,100,000 \$1,100,000 Organization Cost \$50,000 \$50,000 \$50,000 Incorporation Exp \$50,000 \$50,000 \$50,000 Securities: Legal and other \$0 \$125,000 \$125,000 TOTAL ASSET \$4,475,000 \$4,600,000 \$4,600,000 LIABILITIES Business Loan \$1,100,000 \$1,100,000 \$1,100,000 Mortgage \$2,275,000 \$0 \$0 \$0 \$0 \$0 TOTAL LIABILITIES \$3,375,000 \$1,100,000 \$1,100,000

EQUITY Starting Common Equity \$1,100,000 \$1,100,000 \$1,100,000 Extra equity \$0 \$2,400,000 \$600,000 Total Common Equity \$1,100,000 \$3,500,000 \$1,700,000 Preferred Equity \$0 \$0 \$1,800,000 Total

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