A new business venture is expecting the followings: Revenues= $5,000,000 Cost of Goods Sold= $3,000,000 Administrative Expenses= $1,000,000Marketing Expenses = $200,000 Depreciation Expenses= $100,000 Interest Expenses= $50,000 Tax Rate = 25% Calculate: a) Variable Cost Revenue Ratio (VCRR) b) Cash Fixed Costs (CFC) c) Total operating fixed costs (TOFC) d) EBDAT and Survival Revenues (SR) breakeven level e) NOPAT and Operating breakeven revenues (NR) level

a) Variable Cost Revenue Ratio (VCRR) = Variable cost / Net revenue = 3000000 / 5000000 = 0.60

b) Cash Fixed Costs (CFC) = Administrative Expenses + Marketing Expenses + Interest expense

= 1000000 + 200000 + 50000 = 1250000

c) Total operating fixed costs (TOFC) = Administrative Expenses + Marketing Expenses + Depreciation Expenses = 1000000 + 200000 + 100000 = 1300000

d) EBDAT and Survival Revenues (SR) breakeven level:-

SR = [CFC/(1 - VCRR)]

= [1250000/(1-0.60)]

= 3125000

e) NOPAT and Operating breakeven revenues (NR) level

NR = [TOFC/(1 - VCRR)]

= [1300000/(1-0.60)]

= 3250000