Requirement 1. If Winter Runs 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 Winter Runs' projected income. 54,400,000 X Revenue at market price More info Less: Total costs 44,480,000 Operating income 9,920,000 Investors would like to earn a 12% return on investment on the company's (Round the percentage to the nearest hundredth percent, X.XX%.) $111,000,000 of assets. Winter Runs projects fixed costs to be $37,000,000 for the ski season. The resort serves about 680,000 skiers and snowboarders each season. Winter Runs's projected operating income (profit) as a percent of assets amounts to 8.94 %. Variable costs are about $11 per guest. Last year, due to its favorable reputation, Winter Runs was a price-setter and was able to charge $5 more per lift ticket than its Will investors be happy with this profit level? competitors without a reduction in the number of customers it received. Assume that Winter Runs' reputation has diminished and other resorts in the vicinity No, because the expected profit level does not meet the investors' target return on assets. are charging only $80 per lift ticket. Winter Runs has become a price-taker and will not be able to charge more than its competitors. At the market price, Winter Runs Requirement 2. Assume Winter Runs has found ways to cut its fixed costs to $35,500,000. What is its new target variable cost per skier/snowboarder? managers believe they will still serve 680,000 skiers and snowboarders each season. Complete the following table to calculate Winter Runs' new target variable cost per customer. (Round your final answer to the nearest cent.) Revenue at market price 64,400,000 Less: Desired profit 13,320,000 Print Done Target full cost 41,080,000 Less: Reduced level of fixed costs Target total variable costs Divided by number of skiers / snowboarders Target variable cost per skier / snowboarder