Question
Albany Golf Course is planning for the coming golfing season. Investors want a 10% return on the firm's $50,000,000 of assets. Albany's fixed costs to
Albany Golf Course is planning for the coming golfing season. Investors want a 10% return on the firm's $50,000,000 of assets. Albany's fixed costs to groom the greens and fairways are projected to be $30,000,000 for the season, and variable costs are $17 per round of golf. About 600,000 rounds of golf are expected to be played there this year. Albany has a great reputation in the area, so it has some control over the price it charges for a round of golf. Using cost-plus pricing, what price should Albany charge for a round of golf to achieve the desired profit? A. $33 B. $67 C.$75 D. $50
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