Green Valley golf course is planning for the coming season.Investors would like to earn a 14% 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 $18,000,000 for the golfing season.About 400,000 golfers are expected each year.Variable costs are about $8 per golfer.The Green Valley golf course has a favorable reputation in the area and therefore,has some control over the price of a round of golf.Using a cost-plus approach,what price should Green Valley charge for a round of golf?

Question

Quizplus · Accepted Answer

The Answer of  Green Valley golf course is planning for the coming season.Investors would like to earn a 14% 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 $18,000,000 for the golfing season.About 400,000 golfers are expected each year.Variable costs are about $8 per golfer.The Green Valley golf course has a favorable reputation in the area and therefore,has some control over the price of a round of golf.Using a cost-plus approach,what price should Green Valley charge for a round of golf?

Green Valley Golf Course Is Planning for the Coming Season