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

question 81

Multiple Choice

Use the information below to answer the following question(s) :
Philadelphia Swim Club is planning for the coming year. Investors would like to earn a 10% return on the company's $30 million of assets. The company primarily incurs fixed costs to maintain the swimming pool. Fixed costs are projected to be $12,500,000 for the year. About 500,000 members are expected to swim each year. Variable costs are about $10 per swimmer.
-Using a cost-plus approach, what price should Philadelphia Swim Club charge for a membership?

• A) $41.00
• B) $37.50
• C) $29.00
• D) $ 0.17

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Definitions:

Scienter

A legal term referring to the knowledge of wrongdoing, especially with intent to deceive or defraud.

Securities Exchange Act

A U.S. federal law regulating the trading of securities, such as stocks and bonds, in order to protect investors from fraudulent practices.

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