Technical question help
Was asked this in an interview recently wasn’t sure how to go about it if other people know. Answer is 4.5mm for EBITDA in year 3 but I’m having trouble getting there.
Suppose you've build a model with the following assumptions:
- Revenue in year 2=$100mm
- EBITDA in year 2=$10mm
- 50% fixed to variable costs
Assume revenue drops by 10% in year 3, what is the impact on EBITDA?
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