SnowCastles operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season

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Requirement $1.$ If SnowCastles 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 SnowCastles' projected income.

Revenue at market price $$

Less: Total costs $$

$$ Operating income $$

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Requirements

Invest$$r$\text{'}$s would like to earn a $15\%$ return on investment on the company's $$148,500,000$ of assets. SnowCastles projects fixed costs to be $$35,000,000$ for the ski season. The resort serves about $725,000$ skiers and snowboarders each season. Variable costs are about $$7$ per guest. Last year, due to its favorable reputation, SnowCastles was a price$-$setter and was able to charge $$5$ more per lift ticket than its competitors without a reduction in the number of customers it received.

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Assume that SnowCastles' reputation has diminished and other resorts in the vicinity are charging only $$81$ per lift ticket. SnowCastles has become a price$-$taker and will not be able to charge more than its competitors. At the market price, SnowCastles managers believe they will still serve $725,000$ skiers and snowboarders each season