Rolling Hills Golf Course Is Planning for the Coming Golfing

Rolling Hills Golf Course is planning for the coming golfing season.Investors would like to earn a 10% 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 season.About 500,000 rounds of golf are expected to be played each year.Variable costs are about $17 per round of golf.Rolling Hills Golf Course has a favorable reputation in the area and,therefore,has some control over the sales price of a round of golf.Using a cost-plus pricing approach,what sales price should Rolling Hills charge for a round of golf to achieve the desired profit?

A) $60
B) $77
C) $43
D) $89

Correct Answer:

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