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Sensitivity Exercise: Your customer operates a hotel with a small water park in Fargo. The...

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Accounting

Sensitivity Exercise:
Your customer operates a hotel with a small water park in Fargo. The water park is operated in a separate entity than the hotel, with revenues from hotel
guests and outside users, and the owners reported the results below for the water park in 2023. A new competing water park will open in 2024, so the
management would like to assess the impact of a 25% decline in customer visits at the 2023 average spend rate per visit. Alternatively, they feel they may
be able to keep the same number of clients by dropping their average price by 35%. Calculate the impact of each of these changes individually, as well as
the potential gross revenue figure if both of these events should occur at the same time.
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