What's (e)?

Your business plan for your proposed start-up firm envisions first-year revenues of $60,000, fixed costs of $30,000, and variable costs equal to one-third of revenue. a. What are expected profits based on these expectations? Expected profit $ 10,000 b. What is the degree of operating leverage based on the estimate of fixed costs and expected profits? (Round your answer to 2 decimal places.) Degree of operating leverage 4.00 c. If sales are 10% below expectation, what will be the percentage decrease in profits? Decrease in profits 40% e. Based on the DOL, what is the largest percentage shortfall in sales relative to original expectations that the firm can sustain before profits turn negative? (Round your answer to 1 decimal place.) Shortfall