K Winter Dream Inc. operates a Rocky Mountain ski resort. The company is planning its lift...

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K Winter Dream Inc. operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to eam a 16% return on the company's $115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts Winter Dream projects fixed costs to be $35,600,000 for the ski season. The resort serves 800.000 skiers and snowboarders each season. Variable costs are $8 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 $64 per ift 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 800,000 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 lever? 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 Less: Total costs Operating income Compared to the desired operating income of Expected excess profit (profit shortfall) Requirements 1. If Winter Dream can't reduce its costs, what profit wil it eam? State your answer in dollars and as a percent of assets. Will investors be happy with the profit lever? Show your analysis 2. Assume that Winter Dream has found ways to cut its fixed costs to $30 milion What is i its new target variable cost per skien'snowboarder? Assume investors want to eam a 10% retum on assets Compare this to the current variable cost per skienianowboarder Comment on your results this Video Get more help Print Done X Clear all Check answer K Winter Dream Inc. operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to eam a 16% return on the company's $115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts Winter Dream projects fixed costs to be $35,600,000 for the ski season. The resort serves 800.000 skiers and snowboarders each season. Variable costs are $8 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 $64 per ift 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 800,000 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 lever? 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 Less: Total costs Operating income Compared to the desired operating income of Expected excess profit (profit shortfall) Requirements 1. If Winter Dream can't reduce its costs, what profit wil it eam? State your answer in dollars and as a percent of assets. Will investors be happy with the profit lever? Show your analysis 2. Assume that Winter Dream has found ways to cut its fixed costs to $30 milion What is i its new target variable cost per skien'snowboarder? Assume investors want to eam a 10% retum on assets Compare this to the current variable cost per skienianowboarder Comment on your results this Video Get more help Print Done X Clear all Check answer