Requirement $1.$ If Winter Runs 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?

Complete the following table to calculate Winter Runs' projected income.

Revenue at market price

Less: Total costs

Operating income

$($Round the percentage to the nearest hundredth percent, X$.$XX$\%.)$

Winter Runs's projected operating income $($profit$)$ as a percent of assets amounts to

Will investors be happy with this profit level?

Requirement $2.$ Assume Winter Runs has found ways to cut its fixed costs to $$32,000,000.$ What is its new target variable cost per skier$/$snowboarder$?$

Complete the following table to calculate Winter Runs' new target variable cost per customer. $($Round your final answer to the nearest cent.$)$

More info

Investors would like to earn a $15\%$ return on investment on the company's

$$148,500,000$ of assets. Winter Runs projects fixed costs to be $$35,000,000$ for the

ski season. The resort serves about $725,000$ skiers and snowboarders each

season. Variable costs are about $$8$ per guest. Last year, due to its

favorable reputation, Winter Runs 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 Runs' reputation has diminished and other resorts in the vicinity

are charging only $$82$ per lift ticket. Winter Runs has become a price$-$taker and will

not be able to charge more than its competitors. At the market price, Winter Runs

managers believe they will still serve $725,000$ skiers and snowboarders each

season.

Revenue at market price

Less: Desired profit

Requirements

$1$

Target full cost

Less: Reduced level of fixed costs

If Winter Runs cannotreauce lis costs, wnat provil'wilitit earn? Jlate your

answer in dollars and as a percent of assets. Will investors be happy with the

profit level?

Assume Winter Runs has found ways to cut its fixed costs to $$32,000,000.$ What

is its new target variable cost per skier$/$snowboarder$?$