A new company is developing its financial model.  It has done extensive market and industry research and the founders are confident that the model will be reliable in estimating costs and revenues in the short term.  The team is considering an aggressive cost model with a significant commitment to fixed expenditures; and they want to evaluate how sensitive profit projections will be to deviations from the target Sales estimate. Part of the Plan includes incurring periodic fixed financial costs (loan payments and leases) of $ 225,000. The company expects to sell its product for $15 per unit and to incur Variable Costs of $6 to produce each unit. Operating Fixed Costs (not including Depreciation) are projected at $550,000.

 

What is the Company's EBITDA Breakeven Sales Volume in DOLLARS?

At a projected Sales level of $1,500,000, what Degree of Operating Leverage (DOL) is imputed in the projected cost structure?

At a Projected Sales Level of $1,500,000, What Degree of Financial Leverage (DFL) is imputed in the projected cost structure? 

 If actual Sales are 10% less than $1,500,000 and the projected cost structure was accurate, by what percentage (%) would Net Income decrease from projection?