Question

Your first assignment is to analyze and forecast Netflix’s 2018 operating income.  

Condensed data in thousands of dollars (000’s) from Netflix’s 2016 and 2017 income statements are below:

In thousands	2017	2016
Revenue	$11,692,713	$8,830,669
Total cost of revenues and operating expenses	(10,854,034)	(8,450,876)
Operating income	$838,679	$379,793

1. Develop a cost-estimation equation for Netflix’s annual cost of revenues and operating expenses.
2. Determine Netflix’s annual break-even point.
3. Predict operating profit for 2018, assuming 2018 sales of $15,794,341
4. Using www.sec.gov, look up Netflix’s 2018 Operating income reported in the 10K
5. Is the cost-estimation equation created in a useful framework for predicting Netflix’s operating income?

I need help with C,E only

Answer 1