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A company has $2 million of sales today, SG&A costs of $1.5 million excluding depreciation, annual depreciation of $1 million, and a COGS of 60%.
A company has $2 million of sales today, SG&A costs of $1.5 million excluding depreciation, annual depreciation of $1 million, and a COGS of 60%. Management estimates that if there is a large growth in sales, then the increase of SG&A excluding depreciation will equal to 10% of sales increment, and the increase of depreciation will equal to 5% of sales increment. No other income during this time.
- Then what are the cash breakeven sales?
- Then what are the book breakeven sales?
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