Riverview golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $47,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $11,000,000 for the golfing season. About 450,000 golfers are expected each year. Variable costs are $15 per golfer. The Riverview golf course is a price-taker and won't be able to charge more than its competitors who charge $60 per round of golf. What profit will Riverview earn in terms of dollars? $14,890,000 $5,640,000 $21,360,000 $9,250,000
Riverview golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $47,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $11,000,000 for the golfing season. About 450,000 golfers are expected each year. Variable costs are $15 per golfer. The Riverview golf course is a price-taker and won't be able to charge more than its competitors who charge $60 per round of golf. What profit will Riverview earn in terms of dollars? $14,890,000 $5,640,000 $21,360,000 $9,250,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Riverview golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $47,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $11,000,000 for the golfing season. About 450,000 golfers are expected each year. Variable costs are $15 per golfer. The Riverview golf course is a price-taker and won't be able to charge more than its competitors who charge $60 per round of golf. What profit will Riverview earn in terms of dollars?
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$14,890,000 |
||
|
$5,640,000 |
||
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$21,360,000 |
||
|
$9,250,000 |
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