1. Determine if the costs listed in the table below are variable or fixed-list variable costs as \% of Box Office Revenue and fixed costs as a dollar amount. ( 6 points) Note - remember to only consider the amount of revenue retained by the studio. " Note that direct costs have a mixed cost structure with a component being variable cost (Gross profit participation) and a component being fixed cost (Production costs). 2. What amount of box office gross revenue is required before Forrest Gump earns a profit according to the 'net profit participation' contract? Assume that financing costs are fixed. (6 points) Hint: BE S= Fixed Costs /(1 Variable cost %) 3. Discuss the concept of a 'rolling break.' Does the breakeven point really change after the film is released? a. What is a 'rolling break' in general? ( 3 points) b. What are the causes of a 'rolling break' in this industry? (3 points) 4. Assume that Paramount expects Forrest Gump to gross $700 million in total box office revenues over the life of the film (remember that Paramount only recognizes 50% of that). How much profit on this film would Paramount have reported in its 1994 external financial statements? (6 points)