See the Winter Sports Inc. data from S8-2. Assume that Winter Sports' reputation has diminished and other
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1. If Winter Sports 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.
2. Assume that Winter Sports have found ways to cut its fixed costs to $30 million. What is its new target variable cost per skier/snowboarder? Assume investors want to earn a 15% return on assets. Compare this to the current variable cost per skier / snowboarder. Comment on your results.
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