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Walt Disney World Theme Park scenario is solved.

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Walt Disney World Theme Parks offer visitors a wide variety of ticket options. The one thing these ticket options have in common is that they entail a fixed entrance fee and allow customers to take as many rides as they want at no additional charge. For instance, by purchasing a 1 â?" Day ticket for about $66, a customer gains unlimited access to the park of her choice for one day.

Wouldnâ??t Disney earn higher profits if it charged visitors, say, $11 each time they went on a ride? Defend your response

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Disney would not earn higher profits if it charged visitors per ride rather than a one-price ticket. This is due to the fact that the rides are much cheaper when there is a one-price ticket and visitors know this so they are willing to spend more for such a ...

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Walt Disney World Theme Parks offer visitors a wide variety of ticket options. The one thing these ticket options have in common is that they entail a fixed entrance fee and allow customers to take as many rides as they want at no additional charge. For instance, by purchasing a 1 â?" Day ticket for about $66, a customer gains unlimited access to the park of her choice for one day.

Wouldnâ??t Disney earn higher profits if it charged visitors, say, $11 each time they went on a ride? Defend your response

$2.19
See Also This Related BrainMass Solution

Planning New Magic At Disney

After its success domestically, the Walt Disney Company (Disney) decided to share its magic with the rest of the world. After successfully opening Tokyo Disneyland, Disney was moving around the world to create Euro Disneyland. The financing plan for Euro Disneyland included an initial public offering by the main project firm. The financing plan would change Euro Disneyland from an internally financed, privately owned project into a highly leveraged, publicly owned entity in which Disney would hold only a minority interest. This table provides financial projections for the first five years of operations.

[See the attached table]

QUESTION:
Recalculate the value for Euro Disneyland estimated at time −3 for two cases in which the assumptions are changed to the following:
a. Revenues after year 5 grow at 6% and operating expenses grow at 5%.
b. Revenues after year 5 grow at 5% and operating expenses grow at 6%.

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