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 pools. 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. Philadelphia Swim Club won't be able to charge more than its competitors who charge $37.00 for a membership. What profit (loss) will it earn in terms of dollars? Select one: a. $(12,500,000) b. $11,000,000 c. $1,000,000 d. $2,500,000 e. $(1,000,000)
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 pools. 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. Philadelphia Swim Club won't be able to charge more than its competitors who charge $37.00 for a membership. What profit (loss) will it earn in terms of dollars? Select one: a. $(12,500,000) b. $11,000,000 c. $1,000,000 d. $2,500,000 e. $(1,000,000)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 pools. 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. Philadelphia Swim Club won't be able to charge more than its competitors who charge $37.00 for a membership. What
Select one:
a. $(12,500,000)
b. $11,000,000
c. $1,000,000
d. $2,500,000
e. $(1,000,000)
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