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

question 76

Multiple Choice

Use the information below to answer the following question(s) :
Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $45 million of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $20,000,000 for the golfing season. About 400,000 golfers are expected each year. Variable costs are about $15 per golfer.
-If the Mountaintop golf course is a price-taker and won't be able to charge more than its competitors who charge $75 per round of golf. What profit will it earn as a percent of assets?

• A) Loss of 8.89%
• B) Profit of 35.56%
• C) Profit of 8.89%
• D) Loss of 57.67%

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Definitions:

Request for Proposals

A formal document issued by an organization inviting suppliers to submit proposals for a specified product or service.

Potential Vendors

Businesses or individuals that may be considered as suppliers or providers of goods and services, but have not yet been selected or contracted.

Synopsis

A brief summary of the main points of a larger work or presentation.

Executive Summary

A brief section at the beginning of a document, report, or proposal, summarizing the main points for a quick overview.