Answer:
Option (C) is correct.
Explanation:
Given that,
Total Fixed cost = $2,500,000
Total number of rooms = 250
Number of days in a year = 365
Daily rent per room = $65
Variable cost per room = $15
Contribution margin per room:
= Daily rent - Variable cost per room
= $65 - $15
= $50
Total contribution margin for the year:
= Number of days in a year × Contribution margin per room × Total number of rooms
= 365 × $50 × 250
= $45,62,500
Therefore, the net income for one year is calculated as follows:
= Total contribution margin for the year - Fixed cost
= $4,562,500 - $2,500,000
= $ 20,62,500
