What does a break-even analysis tell the small business owner?
What will be an ideal response?
Answer: Business owners should know their firm's break-even point, the level of operations at which total revenues equal total costs; it is the point at which companies neither earn a profit nor incur a loss. Although just a simple screening device, break-even analysis is a useful planning and decision making tool.
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Two advantages of decentralization are that managers are encouraged to solve their own problems, and decisions are made more quickly, increasing the organization's flexibility and efficiency.
a. True b. False
According to the text, in order to develop a distribution of possible net present values from international projects, a firm should use:
a. a risk-adjusted discount rate. b. a payback period. c. certainty equivalents. d. simulation.