Term
| Accounting operating profit (EBIT) break-even point |
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Definition
| the number of units that must be sold for accounting operating profit to equal $0 |
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Term
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Definition
| an analysis that tells us how many units must be sold in order for a project to break even on a cash flow or accounting profit basis |
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Term
| Crossover level of unit sales (CO) |
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Definition
| the level of unit sales at which cash flows or profitability for one project alternative switches from being lower than that of another alternative to being higher |
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Term
| Degree of accounting operating leverage (Accounting DOL) |
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Definition
| a measure of the sensitivity of accounting operating profits (EBIT) to changes in revenue |
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Term
| Degree of pretax cash flow operating leverage (Cash Flow DOL) |
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Definition
| a measure of the sensitivity of cash flows from operations (EBITDA) to changes in revenue |
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Term
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Definition
| a measure of the relative amounts of fixed and variable costs in a project's cost structure; operating leverage is higher with more fixed costs |
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Term
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Definition
| the dollar amount that is left over from the sale of a single unit after all the variable costs associated with that unit have been paid; this is the amount that is available to help cover FC for the project |
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Term
| Pretax operating cash flow |
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Definition
| earnings before interest, taxes, depreciation, and amortization, or EBITDA |
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Term
| Pretax operating cash flow (EBITDA) break-even point |
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Definition
| the number of units that must be sold for pretax operating cash flow to equal $0 |
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Term
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Definition
| a measure of the value a project generates for each dollar invested in that project |
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Term
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Definition
| an analytical method concerned with how the results from a financial analysis will change under alternative scenarios |
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Term
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Definition
| examination of the sensitivity of the results from a financial analysis to changes in individual assumptions |
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Term
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Definition
| an analytical method that uses a computer to quickly examine a large number of scenarios and obtain probability estimates for various values in a financial analysis |
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