SnowDream operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. 0 (Click the icon to view the information) Read the muirements. Requirement 1. If SnowDream cannot reduce its costs, what prot will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the prot level? Complete the following table to calculate SnowDream's projected income. Revenue at market price Less: Total costs Operating income (Round the percentage to the nearest hundredth percent, X.XX%.) SnowDream's projected operating income (prot) as a percent of assets amounts to %. Will investors be happy with this profit level? V Requirement 2. Assume SnowDream has found ways to cut its xed costs to $35,000,000. What is its new target variable cost per skier/snowboarder! Complete the following table to calculate SnowDream's new target variable oost per customers (Round your nal answer to the nearest cent.) Revenue at market price Less: Desired prot o More Info Investors would like to earn a 12% return on investment on the company's $111,000,000 of assets. SnowDream projects xed costs to be $37,000,000 for the ski season. The resort serves about 680,000 skiers and snowboarders each season. Variable costs are about $13 per guest. Last year, due to its favorable reputation, SnowDream 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 reoeived. Assume that SnowDream's reputation has diminished and other resorts in the vicinity are charging only $82 per lift ticket. SnowDream has become a price-taker and will not be able to charge more than its competitors. At the market price, SnowDream managers believe they will still serve 680,000 skiers and snowboarders each season. SnowDream operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. i (Click the icon to view the information.) Read the requirements. Operating income (Round the percentage to the nearest hundredth percent, X.XX%.) SnowDream's projected operating income (profit) as a percent of assets amounts to % . i More Info - X Will investors be happy with this profit level? Investors would like to earn a 12% return on investment on the company's Requirement 2. Assume SnowDream has found ways to cut its fixed costs to $35,000,000. What is its new target variable cost per skier/snowboarder? $111,000,000 of assets. SnowDream projects fixed costs to be $37,000,000 for the ski season. The resort serves about 680,000 skiers and snowboarders each season. Complete the following table to calculate SnowDream's new target variable cost per customer. (Round your final answer to the nearest cent.) Variable costs are about $13 per guest. Last year, due to its favorable reputation, SnowDream was a price-setter and was able to charge $5 more per lift ticket than its Revenue at market price competitors without a reduction in the number of customers it received Less: Desired profit Assume that SnowDream's reputation has diminished and other resorts in the vicinity are charging only $82 per lift ticket. SnowDream has become a price-taker and will not Target full cost be able to charge more than its competitors. At the market price, SnowDream Less: Reduced level of fixed costs managers believe they will still serve 680,000 skiers and snowboarders each season. Target total variable costs Divided by number of skiers / snowboarders Print Done Target variable cost per skier / snowboarder
