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V SnowCastles operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. i(Click the icon to

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V SnowCastles 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. 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 More info - X Less: Total costs Operating income Investors would like to earn a 15% return on investment on the company's $135,000,000 of assets. SnowCastles 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 $13 per guest. Last year, due to its favorable reputation, SnowCastles was a price-setter and was able to charge $4 more per lift ticket than its competitors without a reduction in the number of customers it received. Assume that SnowCastles' reputation has diminished and other resorts in the vicinity are charging only $84 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 750,000 skiers and snowboarders each season. Print Done X Requirements 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? 2. Assume SnowCastles has found ways to cut its fixed costs to $36,000,000, What is its new target variable cost per skiersnowboarder? Print Done

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