Mount Snows operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season

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Requirement $1.$ If Mount Snows cannot 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?

Complete the following table to calculate Mount Snows' projected income

Revenue at market price

Less: Total costs

Operating income

Requirements

If Mount Snows cannot 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?

$2.$ Assume Mount Snows has found ways to cut its fixed costs to $$31,500,000.$ What is its new target variable cosi per skier$/$snowboarder$?$

More info

Investors would like to earn a $14\%$ return on investment on the company's $$183,750,000$ of assets. Mount Snows projects fixed costs to be $$33,000,000$ for the ski season. The resort serves about $725,000$ skiers and snowboarders each season Variable costs are about $$12$ per guest. Last year, due to its favorable reputation, Mount Snows was a price$-$setter and was able to charge $$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 $$89$ 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 $725,000$ skiers and snowboarders each season