This Question 1 pt This Quiz 10 pts possible Mountaintop gol

This Question: 1 pt This Quiz: 10 pts possible Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return e company\'s $46,000,000 of assets. The company pn any incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $24,000,000 for the golfing season. About 410,000 golfers are expected each year costs are about $18 per golfer. Mountaintop golf course is a price-taker and won\'t be able to charge more than its competitors who charge $110 per round of OA. B. ° C. D. Loss of 102%. Profit of 29.83% Loss of 29.83% Profit of 146.59% 20

Solution

Calculation of Profit/Loss:

Sales                (410,000* $ 110)         = $ 45,100,000

-Variable cost (410,000* $ 18)           = $ 7,380,000

=Contribution margin                         = $ 37,720,000

-Fixed cost                                          = $ 24,000,000

= Profit                                                = $ 13,720,000

Calculation of profit percentage on Assets:

= Profit/Assets*100    =$ 13,720,000/ $ 46,000,000*100

            Profit of          = 29.826087% or 29.83 %

So, Answer is B , i.e., Profit of 29.83%

Calculation of Profit/Loss:

Sales   (410,000* $ 110)         = $ 45,100,000

-Variable cost (410,000* $ 18) = $ 7,380,000

=Contribution margin   = $ 37,720,000

-Fixed cost        = $ 24,000,000

= Profit   = $ 13,720,000

  Calculation of profit percentage on Assets:

= Profit/Assets*100

=$ 13,720,000/ $ 46,000,000*100

Profit of = 29.826087% or 29.83 %

So, Answer is B , i.e., Profit of 29.83%