Snow Showers 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 16% return on the company's $100 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Snow Showers projects fixed costs to be $32,750,000 for the ski season. The resort serves about 780,000 skiers and snowboarders each season. Variable costs are about 9 per guest. Currently, the resort had such a favourable reputation among skiers and snowboarders that it had some control over the lift-ticket prices. Assume that Snow Showers' reputation has diminished and other resorts in the vicinity are charging only $63 per lift ticket. Snow Showers has become a price-taker and won't be able to charge more than its competitors. At the market price, Snow Showers managers believe they will still serve 780,000 skiers and snowboarders each season. Requirements 1. If Snow Showers 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 Snow Showers' 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) As a percentage of assets, Snow Showers's projected profit is %. (Round the percentage to two decimal places, X.XX%.) Will investors be happy with this profit level? Share prices 2. Assume that Snow Showers has found ways to cut its fixed costs to $29.5 million. What is its new target variable cost per skier/snowboarder? Compare this to the current variable cost per skier/snowboarder. Comment on your results. Complete the following table to calculate Snow Showers' new target variable cost per customer. (Round your final answer to the nearest cent.) Less Less: Target total variable costs Divided by: Target variable cost per skier / snowboarder This target variable cost is the current variable cost of 9. Snow Showers this target since it is the current variable cost