SnowDelight operates a Rocky Mountain resort. The company is planning pricing for the coming s o on Investors would like bema 10% rotum on the company's $115 million of assets. The company incurs primarily foxed costs to groom the runs and operate the lifts SnowDelight projects fixed costs to be $35,000,000 for the season. The resort serves about 800,000 skiers and snowboarders each season. Variable costs are $8 per guest. The resort had such a favorable reputation among skers and snowboarders that it had some control over the ticket prices Assume that SnowDelight's reputation has diminished and other resorts in the vicinity are chartig only $64 pernicket SnowDelight has become a price-taker and won't be able to charge more than its competitors. At the market price, SnowDelight's managers believe they will still serve 800.000 skin and snowboardons each season Read the rourements Requirements As a percentage of assets, SnowDelight's projected profitis Will investors be happy with this profit level? 1. No, because the expected return on assets is less than the desired return on a SnowDelight can't reduce its costs, what profit will team? State your answer in dollars and as a percent of assets. Wil investors be happy with the profit level? Show your 2. Assume that SnowDelight has found ways to out its fixed costs to $ 30 million per s nowboarder Comment on your 2. Assume that SnowDelight has found ways to cut its fed costs to $30 million. What is it new target variable cost personowboarder? Compare this to the current variable cont perskie snowboarder. Comment on your resu Complete the following table to calculate SnowDelight's new target variable con Print Done Less: Target total variable costs Divided by SnowDelight operates a Rocky Mountains rosort. The company is planning ticket pricing for the coming skisson Investors would like to earn a 16% return on the company's $115 million of assets. The company Inours primarily forced costs to groom the runs and operate the lifts Snowlight projects fixed costs to be $35.600.000 for the season. The resort serves about 800,000 skiers and snowboarders each season Variable costs are 58 per quest The resort had such a favorable reputation among sons and snowboarders that it had some control over the ticket prices Assume that SnowDelight's reputation has diminished and other resorts in the vicinity are charging only $64 per inickel. SnowDelight has become a price-taker and won't be able to charge more than its competitors. At the market price, SnowDelight's managers believe they will still serve 800,000 skiers and snowboarders each season Read the recuirements Wil investors be happy with this profit level? No, because the expected return on assets is less than the desired return on Stock prices may decline as a result 2. Assume that SnowDelight has found ways to cut its fand costs to $30 million. What is its new target variable cost per sklenowboarder? Compare this to the current variable cost por ser snowboarder. Comment on your results Complete the following table to calculate SnowDelight's new target variable cost per customer. (Round your final answer to the nearest cant.) Desired profit Number of skins/snowboarders Reduced level of feed costs Revenue at market price Target revenue Target total costs Target tal variable costs Choose from any list or enter any number in the input fields and then click Check Answer part 1 remaining Clear All Check
