1.	If SnowParadiseSnowParadise can't reduce its costs, what profit will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Show your analysis.
2.	Assume that SnowParadiseSnowParadise has found ways to cut its fixed costs to $ 28.5$28.5 million. What is its new target variable cost per skier/snowboarder? Compare this to the current variable cost per skier/snowboarder. Comment on your results.

S8-3 (similar to Question Help SnowParadise operates a Rocky Mountain s esort. The company S planning its ft ticket pri ng for he coming sk season. h stors ould like o earn a 17% re u on he companys S1 milion o assets. The company incurs prim y fixed costs groom the runs and operate the lifts. Sno Paradise be S44 000 000 for the ski season. The resort serves about 77 snowboarders each season. Variable costs are $7 per guest. The resort had such a favorable reputation among skiers and snowboarders that it had some control over the lift ticket prices. projects fixed costs to 5,000 skiers and Assume that SnowParadise's reputation has diminished and other resorts in the vicinity are charging only $66 per lift ticket. SnowParadise has become a price-taker and won't be able to charge more than its competitors. At the markat price, SnowParadise's managers believe they will stll serve 775,000 skiers and snowboarders each season. Read the requirement 1. If SnowParadise can't reduce its costs, what profit ill it carn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Snow your analysis. Complete the following table to calculate SnowParadise's projected income and excess profit or shortfall. (Use parentheses or a minus sign to show a profit shortfal Revenue at market price Less: Total costs Operating income Compared to the desired operating income of Expected excess profit (profit shortfall) S8-3 (similar to Question Help SnowParadise operates a Rocky Mountain s esort. The company S planning its ft ticket pri ng for he coming sk season. h stors ould like o earn a 17% re u on he companys S1 milion o assets. The company incurs prim y fixed costs groom the runs and operate the lifts. Sno Paradise be S44 000 000 for the ski season. The resort serves about 77 snowboarders each season. Variable costs are $7 per guest. The resort had such a favorable reputation among skiers and snowboarders that it had some control over the lift ticket prices. projects fixed costs to 5,000 skiers and Assume that SnowParadise's reputation has diminished and other resorts in the vicinity are charging only $66 per lift ticket. SnowParadise has become a price-taker and won't be able to charge more than its competitors. At the markat price, SnowParadise's managers believe they will stll serve 775,000 skiers and snowboarders each season. Read the requirement 1. If SnowParadise can't reduce its costs, what profit ill it carn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Snow your analysis. Complete the following table to calculate SnowParadise's projected income and excess profit or shortfall. (Use parentheses or a minus sign to show a profit shortfal Revenue at market price Less: Total costs Operating income Compared to the desired operating income of Expected excess profit (profit shortfall)