Burr Hill golf course is planning for the coming season. Investors would like to earn a 10% return on the company's $50 million of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $25,000,000 for the golfing season. About 500,000 golfers are expected each year. Variable costs are about $10 per golfer. The Burr Hill golf course is a price-taker and won't be able to charge more than its competitors who charge $65 per round of golf. What profit will it earn as a percent of assets?

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The Answer of Burr Hill golf course is planning for the coming season. Investors would like to earn a 10% return on the company's $50 million of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $25,000,000 for the golfing season. About 500,000 golfers are expected each year. Variable costs are about $10 per golfer. The Burr Hill golf course is a price-taker and won't be able to charge more than its competitors who charge $65 per round of golf. What profit will it earn as a percent of assets?

Burr Hill Golf Course Is Planning for the Coming Season