Winter Dream operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 15% return on the company's $100 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Winter Dream projects fixed costs to be $33,750,000 for the ski season. The resort serves about 750,000 skiers and snowboarders each season. Variable costs are $10 per guest. The resort had such a favorable reputation among skiers and snowboarders that it had some control over the lift ticket prices. Assume that Winter Dream's reputation has diminished and other resorts in the vicinity are charging only $65 per lift ticket Winter Dream has become a price-taker and won't be able to charge more than its competitors. At the market price, Winter Dream's managers believe they will still serve 750,000 skiers and Snowboarders each season. Read the requirements 1. If Winter Dream can't 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? Show your analysis. Complete the following table to calculate Winter Dream's projected income and excess profit or shortfall. (Use parentheses or a minus sign to show a profit shortfall.) Revenue at market price i Requirements Less: Total costs Operating income 1. If Winter Dream can't reduce its costs, what profit will it earn? State your answer in dolla Compared to the desired operating income of and as a percent of assets. Will investors be happy with the profit level? Show your analysis Expected excess profit (profit shortfall) 2. Assume that Winter Dream has found ways to cut its fixed costs to $30 million. What is new target variable cost per skiet/snowboarder? Compare this to the current variable per skier/snowboarder. Comment on your results. Print Done