Hilltop Golf Course Is Planning for the Coming Season

Hilltop Golf Course is planning for the coming season. Investors would like to earn a 15% return on the company's $60,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $30,000,000 for the golfing season. About 600,000 rounds of golf are expected to be played each year. Variable costs are about $15 per round of golf. Hilltop golf course is a price-taker and will not be able to charge more than its competitors, who charge $75 per round of golf. What profit will it earn in terms of dollars?

A) $6,000,000
B) $9,000,000
C) $48,000,000
D) $45,000,000

Correct Answer:

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