Winter Runs operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season.

1. If WinterRuns cannot reduce itscosts, what profit will itearn? State your answer in dollars and as a percent of assets. Will investors be happy with the profitlevel?

Complete the following table to calculate WinterRuns' projected income.

Revenue at market price _____

Less: Total costs _____

Operating Income _____

2. Assume WinterRuns has found ways to cut its fixed costs to $27,500,000. What is its new target variable cost perskier/snowboarder?