SnowDelight operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Requirement 1. If SnowDelight 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 SnowDelight's projected income. Revenue at market price $ 61,500,000 45,000,000 Less: Total costs $ 16,500,000 Operating income (Round the percentage to the nearest hundredth percent, X.XX%.) 12.22 %. SnowDelight's projected operating income (profit) as a percent of asset amounts to Will investors be happy with this profit level? No, because the expected profit level does not meet the investors' target return on assets. Requirement 2. Assume SnowDelight has found ways to cut its fixed costs to $33,800,000. What is its new target variable cost per skier/snowboarder? Complete the following table to calculate SnowDelight's new target variable cost per customer. (Round your final answer to the nearest cent.) Revenue at market price 61500000 54050000 Less: Desired profit 338000000 Target full cost Less: Reduced level of fixed costs 16500000 Target total variable costs Divided by number of skiers / snowboarders Target variable cost per skier / snowboarder - X More info Investors would like to earn a 15% return on investment on the company's $135,000,000 of assets. SnowDelight projects fixed costs to be $36,000,000 for the ski season. The resort serves about 750,000 skiers and snowboarders each season. Variable costs are about $12 per guest. Last year, due to its favorable reputation, SnowDelight 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. Assume that SnowDelight's reputation has diminished and other resorts in the vicinity are charging only $82 per lift ticket. SnowDelight has become a price-taker and will not be able to charge more than its competitors. At the market price, SnowDelight managers believe they will still serve 750,000 skiers and snowboarders each season. Print Done Requirements 1. If SnowDelight 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? 2. Assume SnowDelight has found ways to cut its fixed costs to $33,800,000. What is its new target variable cost per skier/snowboarder? Print Done Clear all Check