SnowDelights operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for...

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SnowDelights operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. (Click the icon to view the information.) Read the requirements. Requirement 1. If SnowDelights 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 SnowDelights' projected income. More info Revenue at market price $ 59,640,000 36,390,000 Less: Total costs Operating income $ 23,250,000 (Round the percentage to the nearest hundredth percent, XXX%.) SnowDelights's projected operating income (profit) as a percent of assets amounts to Will investors be happy with this profit level? 8.91 %. No, because the expected profit level does not meet the investors' target return on assets. Requirement 2. Assume SnowDelights has found ways to cut its fixed costs to $29,000,000. What is its new target variable cost per skier/snowboarder? Complete the following table to calculate SnowDelights' new target variable cost per customer. (Round your final answer to the nearest cent.) Revenue at market price Less: Desired profit Target full cost Less: Reduced level of fixed costs Target total variable costs Divided by number of skiers / snowboarders Target variable cost per skier / snowboarder 59,640,000 26,090,000 Requirements Investors would like to earn a 10% return on investment on the company's $260,900,000 of assets. SnowDelights projects fixed costs to be $30,000,000 for the ski season. The resort serves about 710,000 skiers and snowboarders each season. Variable costs are about $9 per guest. Last year, due to its favorable reputation, SnowDelights was a price-setter and was able to charge $4 more per lift ticket than its competitors without a reduction in the number of customers it received. Assume that SnowDelights' reputation has diminished and other resorts in the vicinity are charging only $84 per lift ticket. SnowDelights has become a price-taker and will not be able to charge more than its competitors. At the market price, SnowDelights managers believe they will still serve 710,000 skiers and snowboarders each season. 1. If SnowDelights 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? 2. Assume SnowDelights has found ways to cut its fixed costs to $29,000,000. What is its new target variable cost per skier/snowboarder? Print Done - X Print Done SnowDelights operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. (Click the icon to view the information.) Read the requirements. Requirement 1. If SnowDelights 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 SnowDelights' projected income. More info Revenue at market price $ 59,640,000 36,390,000 Less: Total costs Operating income $ 23,250,000 (Round the percentage to the nearest hundredth percent, XXX%.) SnowDelights's projected operating income (profit) as a percent of assets amounts to Will investors be happy with this profit level? 8.91 %. No, because the expected profit level does not meet the investors' target return on assets. Requirement 2. Assume SnowDelights has found ways to cut its fixed costs to $29,000,000. What is its new target variable cost per skier/snowboarder? Complete the following table to calculate SnowDelights' new target variable cost per customer. (Round your final answer to the nearest cent.) Revenue at market price Less: Desired profit Target full cost Less: Reduced level of fixed costs Target total variable costs Divided by number of skiers / snowboarders Target variable cost per skier / snowboarder 59,640,000 26,090,000 Requirements Investors would like to earn a 10% return on investment on the company's $260,900,000 of assets. SnowDelights projects fixed costs to be $30,000,000 for the ski season. The resort serves about 710,000 skiers and snowboarders each season. Variable costs are about $9 per guest. Last year, due to its favorable reputation, SnowDelights was a price-setter and was able to charge $4 more per lift ticket than its competitors without a reduction in the number of customers it received. Assume that SnowDelights' reputation has diminished and other resorts in the vicinity are charging only $84 per lift ticket. SnowDelights has become a price-taker and will not be able to charge more than its competitors. At the market price, SnowDelights managers believe they will still serve 710,000 skiers and snowboarders each season. 1. If SnowDelights 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? 2. Assume SnowDelights has found ways to cut its fixed costs to $29,000,000. What is its new target variable cost per skier/snowboarder? Print Done - X Print Done