Use the Information Below to Answer the Following Question(s)

question 187

Multiple Choice

Use the information below to answer the following question(s) :
Green Pastures golf course is planning for the coming season. Investors would like to earn a 10% return on the company's $40 million of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $15,000,000 for the golfing season. About 400,000 golfers are expected each year. Variable costs are about $20 per golfer.
-Using a cost-plus approach, what price should Green Pastures charge for a round of golf?

• A) $47.50
• B) $61.25
• C) $67.50
• D) $0.17

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Definitions:

Utilization

The extent to which a system, resource, or component is used relative to its total capacity, typically expressed as a percentage.

Higher Costs

Increased expenses or financial outlays in comparison to a baseline or expected level, affecting profitability.

Positive Externalities

Benefits that occur as a result of an economic activity which positively affect individuals or entities not directly involved in the activity.

Locate

The act of identifying or establishing the position or place of something, often relevant in logistics, real estate, and data analysis.