Winter Mountain operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. (Click the icon to view the information.) Read the requirements. - X More Info Complete the following table to calculate Winter Mountain's projected income. Revenue at market price $ 62,350,000 43,700,000 Less: Total costs $ 18,650,000 Operating income (Round the percentage to the nearest hundredth percent, X.XX%.) Winter Mountain's projected operating income (profit) as a percent assets an Investors would like to eam a 15% return on investment on the company's $148,500,000 of assets. Winter Mountain projects fixed costs to be $35,000,000 for the ski season. The resort serves about 725,000 skiers and snowboarders each season. Variable costs are about $12 per guest. Last year, due to its favorable reputation, Winter Mountain 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 Winter Mountain's reputation has diminished and other resorts in the vicinity are charging only $86 per lift ticket. Winter Mountain has become a price-taker and will not be able to charge more than its competitors. At the market price, Winter Mountain managers believe they will still serve 725,000 skiers and snowboarders each season. Will investors be happy with this profit level? No, because the expected profit level does not meet the investors' target return Requirement 2. Assume Winter Mountain has found ways to cut its fixed costs R Requirements LI Done T: L 1. If Winter Mountain 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 Winter Mountain has found ways to cut its fixed costs to $32,800,000. What is its new target variable cost per skier/snowboarder? T D TE Print Print Done En Winter Mountain operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. (Click the icon to view the information.) Read the requirements. Complete the following table to calculate Winter Mountain's projected income. Revenue at market price $ 62,350,000 43,700,000 Less: Total costs $ 18,650,000 Operating income (Round the percentage to the nearest hundredth percent, X.XX%.) Winter Mountain's projected operating income (profit) as a percent of assets amounts to 12.56 % 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 Winter Mountain has found ways to cut its fixed costs to $32,800,000. What is its new target variable cost per skier/snowboarder? Complete the following table to calculate Winter Mountain's new target variable cost per customer. (Round your final answer to the nearest cent.) 62,350,000 22,275,000 Revenue at market price Less: Desired profit Target full cost Less: Reduced level of fixed costs Target total variable costs 41,075,000 Divided by number of skiers / snowboarders Target variable cost per skier / snowboarder Enter any number in the edit fields and then click Check
