Mountaintop golf course is planning for the coming season. investors would like to earn a 12% return on the company's $45 million of assets. the company primarily incurs fixed costs to groom the greens and fairways. fixed costs are projected to be$20,000,000 for the golfing season. about 400,000 golfers are expected each year. variable costs are about $15 per golfer. mountaintop golf course has a favorable reputation in the area andtherefore, has some control over the price of a round of golf. using a
costminus−plus
approach, what price should mountaintop charge for a round ofgolf?
a.$51.50
b.$78.50
c. $ 0.21
d. $71.00

The correct option is B

Explanation:

The return on assets would be:

Return on assets (ROA)= Assets × Return

                                      = $45,000,000 × 12%

                                     = $5,400,000

Return per customer = ROA / Number of golfers

                                  = $5,400,000 / 400,000

                                  = $13.50

Fixed Cost per Customer = Fixed Cost / Number of golfers

                                          = $20,000,000 / 400,000

                                         = $50

Cost to be charged per customer = Profit + Fixed Cost + Variable Cost

                                                        = $13.50 + $50 + $15

                                                        = $78.50

hi there,

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answer; manager working long hours; plz check i believe this is correct good luck;