Term
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Definition
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Term
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Definition
Fixed + Variable = FC+vQ
v=variable cost q=quantity |
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| cost to produce one more unit |
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Definition
| have a best, worst, and base scenario and then determine NPV |
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Definition
only allow one variable to change
allows us to isolate eau variable and see how it is affecting the risk |
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| Break Even Analysis (Financial Break Even) |
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Definition
sales level at which NPV=0
1. find the OCF that yields NPV=0
2. solve for Q (know how to go from OCF to Q)-->
OCF=[Q*(P-v)-FC]*1-T)+(D*T) |
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