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problem: A recent business school graduate plans to open a wholesale dairy products firm. The business would be completely financed through equity. He expects the 1st year sales to total $5,500,000. He desires to earn a target pretax profit of 1,000,000 during his first year of operation. Variable costs are forty percent of sales. How large can his fixed operating cost be if he is to meet his profit target? Determine breakeven level of sales at the level of fixed operating costs determined in [A]?

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