AVERAGE ROOM RATE CALCULATION (HUBBART FORMULA)

 INVESTMENT :
Cost of Land, Building & Equipment $ ……………………….
Pre Opening & Working Capital $ ………………………..
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Total Investment $ ………………………….
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 FINANCING OF INVESTMENT :
Permanent Debt $ ………………………..
Owner’s Equity $ ………………………..
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Total Financing $ …………………………..
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 DESIRED NET INCOME (EAT) $ ………………………….

Tax Rate (…… ………….%) $ …………………………
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 EARNING BEFORE INCOME TAX (EBIT) $ ………………………….
 FIXED CHARGES :
- Property taxes & Insurance $ ……………………….
- Interest Expense $ ………………………
- Rent Expense $ ………………………
- Depreciation/Amortization $ ………………………
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Total Fixed Charges $ …………………………….
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 GROSS OPERATING PROFIT ( GOP ) $ …………………………...
 UNDISTRIBUTED EXPENSES :
- Administrative & General $ …………………………
- Advertisement & Promotion $ …………………………
- Human Resources $ ............................
- Data Processing $ …………………………
- Transportation $ …………………………
- POMEC $ ………………………….
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Total Undistributed Expenses $ ……………………………
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 GROSS OPERATING INCOME ( GOI ) $ …………………………….
 DEPT. INCOME (EXCLUDING ROOM) :
- Food & Beverage Dept. $ ………………………...
- Other Dept. $ ………………………...
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Total Dept. Income (Excluding Room) $ ……………………………….
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 REQUIRED ROOMS DEPT. INCOME $ ……………………………….
 ROOMS DEPT. DIRECT EXPENSES $ ……………………………….
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REQUIRED ROOMS REVENUE ………………………………………… $ …………………………………
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 ESTIMATED ROOMS SOLD : ……………………………….................................Rooms.

REQUIRED ROOMS REVENUE

AVERAGE ROOM RATE = -------------------------------------------
ESTIMATED ROOM SOLD