Your business plan for your proposed start-up company calls for first-year revenue of $720,000, fixed costs of $360,000, and variable costs equal to one-third of revenue.

a. What are the expected benefits based on these expectations?

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?

C. If sales are 10% below expectations, what will be the decrease in profits? (Round your answer to 2 decimal places. Omit the "%" sign in your answer.)

Decrease in profits %

my. Based on the DOL, what is the largest percentage shortfall in sales relative to original expectations that the company can sustain before earnings turn negative?

What are the break-even sales at this point? (Round the "Deficit" answer to 2 decimal places. Omit the "$ and %" signs in your answer.)

Deficit % = ?

Break even sales $ =?

Answer rating: 100% (QA)

a The expected benefits can be calculated by subtracting the total costs from the revenue Expected benefits Revenue Total costs Given Revenue 720000 F... View the full answer