Accounting Break Even A Closer Look

In our numerical example, notice that the break-even level is equal to the sum of fixed costs and depreciation, divided by price per unit less variable costs per unit. This is always true. To see why, we recall all of the following variables:

Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition

IV. Capital Budgeting

11. Project Analysis and Evaluation

© The McGraw-Hill Companies, 2002

CHAPTER 11 Project Analysis and Evaluation

Accounting Break-Even

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