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Your business plan for your proposed start - up firm envisions first - year revenues of $ 6 0 , 0 0 0 , fixed
Your business plan for your proposed startup firm envisions firstyear revenues of $ fixed costs of $ and variable costs equal to onethird of revenue.
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a What are expected profits based on these expectations?
Note: Round your answer to the nearest whole number.
b What is the degree of operating leverage based on the estimate of fixed costs and expected profits?
Note: Round your answer to decimal places.
c If sales are below expectation, what will be the percentage decrease in profits?
Note: Round your answer to the nearest whole number.
d 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?
Note: Do not round intermediate calculations. Round your answer to decimal place.
e What are breakeven sales at this point?
Note: Do not round intermediate calculations. Round your answer to the nearest whole number.
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