Question - Willow Golf Course is planning for the coming golfing season. Investors would like to earn a 15% return on the company's $58,000,000 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 600,000 rounds of golf are expected to be played each year. Variable costs are about $17 per round of golf. Willow golf course is a price-taker and will not be able to charge more than its competitors, who charge $75 per round of golf. Compute the operating profit that will be earned.
(a) $4,800,000
(b) $8,700,000
(c) $85,200,000
(d) $45,000,000