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

$($i$)($Click the icon to view the information.$)$

Read the requirements.

Revenue at market price $$ Less: Total costs

Operating income $$

$($Round the percentage to the nearest hundredth percent, X$.$XX$\%.)$

Mountain Points's projected operating income $($profit$)$ as a percent of assets amounts to $\%.$

Will investors be happy with this profit level?

$$

Requirement $2.$ Assume Mountain Points has found ways to cut its fixed costs to $$29,000,000.$ What is its new target variable cost per skier$/$snowboarder$?$

Complete the following table to calculate Mountain Points' new target variable cost per customer. $($Round your final answer to the nearest cent.$)$

Revenue at market price

Less: 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 $$270,000,000$ of assets. Mountain Points projects fixed costs to be $$31,000,000$ for the ski season. The resort serves about $725,000$ skiers and snowboarders each season. Variable costs are about $$10$ per guest. Last year, due to its favorable reputation, Mountain Points was a price$-$setter and was able to charge $$3$ more per lift ticket than its competitors without a reduction in the number of customers it received.

Assume that Mountain Points' reputation has diminished and other resorts in the vicinity are charging only $$87$ per lift ticket. Mountain Points has become a price$-$taker and will not be able to charge more than its competitors. At the market price, Mountain Points managers believe they will still serve $725,000$ skiers and snowboarders each season.

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Question $39$ of $52$

This test: $125$ point$($s$)$ possible

This question: $10$ point$($s$)$ possible

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

$($Click the icon to view the information.$)$

Read the requirements.

Revenue at market price $$

Less: Total costs $$

Operating income $$

$($Round the percentage to the nearest hundredth percent, X$.$XX$\%.)$

Mountain Points's projected operating income $($profit$)$ as a percent of assets amounts to $\%.$

Will investors be happy with this profit level?

$$

Requirement $2.$ Assume Mountain Points has found ways to cut its fixed costs to $$29,000,000.$ What is its new target variable cost per skier$/$snowboarder$?$

Complete the following table to calculate Mountain Points' new target variable cost per customer. $($Round your final answer to the nearest cent.$)$

Revenue at market price

Less: 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

longrightarrow

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

$($Click the icon to view the information.$)$

Read the requirements.

More info

Requirement $1.$ If Mountain Points cannot reduce its costs, what profit will it earn? State y

Complete the following table to calculate Mountain Points' projected income.

Revenue at market price

Less: Total costs

Investors would like to earn a $10\%$ return on investment on the company's $$270,000,000$ of assets. Mountain Points projects fixed costs to be $$31,000,000$ for the ski season. The resort serves about $725,000$ skiers and snowboarders each season. Variable costs are about $$10$ per guest. Last year, due to its favorable reputation, Mountain Points was a price$-$setter and was able to charge $$3$ more per lift ticket than its competitors without a reduction in the number of customers it received.

Operating income

Assume that Mountain Points' reputation has diminished and other resorts in the vicinity are charging only $$87$ per lift ticket. Mountain Points has become a price$-$taker and wil