Question 11

Rolling Hills Golf Course is planning for the coming golfing season. Investors would like to earn a 10% return on the company's $60,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $30,000,000 for the season. About 500,000 rounds of golf are expected to be played each year. Variable costs are about $17 per round of golf. Rolling Hills has a favorable reputation in the area and, therefore, has some control over the sales price of a round of golf. Using a cost-plus pricing approach, what sales price should Rolling Hills charge for a round of golf to achieve the desired profit?

	A.	$60
	B.	$77
	C.	$89
	D.	$43