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Mount Snows operate a Rocky Mountain resort. The company is planning is in ticket pricing for the coming soon Chok the icon to View the
Mount Snows operate a Rocky Mountain resort. The company is planning is in ticket pricing for the coming soon Chok the icon to View the information Read the requirements Requirement 1. i Mount Snows cannot reduce its costs, what profit will it earn? State your answer in dollars and as a percent of assets wat investors be happy with the profilevel? Complete the following table to calculate Mount Snows projected income Revenue at market price Less: Total costs Operating Income (Round the percentage to the nearest hundredth percent. xxxx) Mount Shows projected operating income (profit) as a percent of assets amounts to Will investors be happy with this profit level? Requirement 2. Assume Mount Snows has found ways to cut its fixed costs to $27.500,000. What is its new target variable cost per sker snowboarder? Complete the following table to calculate Mount Snows new target variable cost per customer. (Round your final answer to the nearest cont.) Revenue at market price Loss Desired profit Target full cost Less: Reduced level of fixed costs Target total variable costs Divided by number of skiers / snowboarders Target variable cost per skier/snowboarder Investors would like to earn a 10% return on investment on the company's $260,900,000 of assets. Mount Snows projects fixed costs to be $30,000,000 for the ski season. The resort serves about 710,000 skiers and snowboarders each season. Variable costs are about $10 per guest. Last year, due to its favorable reputation, Mount Snows was a price-setter and was able to charge $4 more per lift ticket than its competitors without a reduction in the number of customers it received. Assume that Mount Snows' reputation has diminished and other resorts in the vicinity are charging only $85 per lift ticket. Mount Snows has become a price-taker and will not be able to charge more than its competitors. At the market price, Mount Snows managers believe they will still serve 710,000 skiers and snowboarders each season
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