WinterSport operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to ear a9 retum on the company's $110 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Wintersport projects fixed costs to be $37,200,000 for the ski season. The resort serves about B3,000 skiers and snowboarders each season. Variable costs are $12 per guest. The resort had such a favcrable reputation among skiers and snowboarders that it had some control over the lift ticket prices Assume that WinterSport's reputation has diminished and other resorts in the vicinity are charging only S60 per llft ticket. WinterSport has become a price-taker and won't be able to charge more than its compe:ltors. At the market price, WinterSport's managers believe they will still serve 830,000 skiers and snowboarders each season. Read the requ rements. 1lf Wintersport 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 WinterSport's projected income and excess profit or shortall. (Use parentheses or a minus sign to show a profit shortfall. Revenue at market price Less: Total coste Operating income Conpared to the desired operating income of Expected excess profit (profit shortfall) $ 49,800,000 Requiremants 1. If WinterSport cant reduce its costs, what profit will it eam? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Show your analysis. Assume that WinterSport has found ways to cut Its fixed costs to $26.41 milllon. Whats its new target variable cost per skien'snowboarder? Compare this to the current variab e cost per skierisnowboarder. Comment on 2. your results. Print Done