Question
Burr Hill golf course is planning for the coming season. Investors would like to earn a 10% return on the company's $50 million of assets.
Burr Hill golf course is planning for the coming season. Investors would like to earn a 10% return on the company's $50 million of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $25,000,000 for the golfing season. About 500,000 golfers are expected each year. Variable costs are about $10 per golfer. The Burr Hill golf course has a favorable reputation in the area and therefore, has some control over the price of a round of golf. What profit will it earn in terms of dollars?
a. $2,500,000
b. $25,000,000
c. $30,000,000
d. $32,500,000
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