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Please help fin the percentage. WinterDream operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season.
Please help fin the percentage.
WinterDream operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 20% return on the company's $110 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. WinterDream projects fixed costs to be $38,200,000 for the ski season. The resort serves about 875,000 skiers and snowboarders each season. Variable costs are $9 per guest. The resort had such a favorable reputation among skiers and snowboarders that it had some control over the lift ticket prices. Assume that WinterDream's reputation has diminished and other resorts in the vicinity are charging only $58 per lift ticket. WinterDream has become a price-taker and won't be able to charge more than its competitors. At the market price, WinterDream's managers believe they will still serve 875,000 skiers and snowboarders each season Read the requirements 1. If WinterDream can't 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? Show your analysis Complete the following table to calculate WinterDream's projected income and excess profit or shortfall. (Use parentheses or a minus sign to show a profit shortfall.) Revenue at market price Less: Total costs Operating income Compared to the desired operating income of Expected excess profit (profit shortfall) (Round the percentage to the nearest hundredth percent, X.XX%.) As a percentage of assets, WinterDream's projected profit is $ 50,750,000 46,075,000 $ 4,675,000 22,000,000 $ (17,325,000) nter any number in the edit fields and then click Check Answer. 2Step by Step Solution
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