Question
Points: 0 of 6 Skiable Acres operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski
Points: 0 of 6 Skiable Acres 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. odoc Requirement 1. If Skiable Acres 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 Skiable Acres' projected income. Revenue at market price Less: Total costs Operating income Requirements More info Investors would like to earn a 12% return on investment on the company's $111,000,000 of assets. Skiable Acres projects fixed costs to be $37,000,000 for th ski season. The resort serves about 680,000 skiers and snowboarders each seaso Variable costs are about $7 per guest. Last year, due to its favorable reputation, Skiable Acres was a price-setter and was able to charge $5 more per lift ticket thar competitors without a reduction in the number of customers it received. Assume that Skiable Acres' reputation has diminished and other resorts in the vicinity are charging only $76 per lift ticket. Skiable Acres has become a price-taker and will not be able to charge more than its competitors. At the market price, Skiable Acres managers believe they will still serve 680,000 skiers and snowboarders each season. Print Done 1. If Skiable Acres 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 Skiable Acres has found ways to cut its fixed costs to $35,000,000. What is its new targe variable cost per skier/snowboarder? Print Done Clear all Check answer
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