How is profitability of proposed unit estimated
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Business owners use several financial analysis tools to understand the profitability of their business and take necessary actions. One such tool is to find the break-even point, which determines exactly how much sales are required to cover the costs and start booking profits. In other words, the break-even point is the sales level at which total revenue generated is equal to the total cost (fixed and variable), meaning that at the break-even point of a company, the profit is zero. The break-even point helps small business owners and entrepreneurs to fix their product prices and also in performing cost-volume-profit analysis.
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