Break-even analysis

Assignment Help Financial Management
Reference no: EM13814598

Break-even analysis. This is the point in which revenue (or savings) from the program equals the cost of the program-the time the company has "broken even" on the cost of the training.

Formula = Break-even point = cost/savings * time

*time is the period of time in which the return is being calculated if annually, then 12 months.

A program has an annual cost of $70,000 and is expected to generate in return a savings of $80,000. When would the break-even point occur, given steady savings and costs?

Why is it important for trainers to be able to estimate the ROI, cost-benefit analysis, and break-even analysis? Give three reasons why calculating this information will assist the training endeavours.

Reference no: EM13814598

Questions Cloud

Considering investing in a complete small business system : Apple is considering investing in a complete small business system. The initial investment will be $70,000. The system is in the 5-year MACRS category, and the firm's tax rate is 43%. Calculate the net after-tax cash flows from this investment. Calcu..
Antitrust policy can preclude the acquisition of competitor : Antitrust policy can preclude the acquisition of a competitor. The dividend yield is the cash dividend divided by the current market price of the stock. Basic earnings per share include all convertible bonds outstanding.  Investors will generally cho..
What form of market information efficiency : What form of market information efficiency are we in, here in the United States. Would you every expect that to change as time goes on, why or why not?
What is expected selling price : A share of stock is now selling for $105. It will pay a dividend of $7 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 7% and the expected rate of re..
Break-even analysis : Break-even analysis. This is the point in which revenue (or savings) from the program equals the cost of the program-the time the company has "broken even" on the cost of the training.
Benefit ratio-value of projected benefit divided by cost : Cost-benefit analysis presents data as a ratio to determine financial impact on company profitability. The formula is: cost-benefit ratio = value of projected benefits divided by cost. What is the cost-benefit ratio of this training? What is the retu..
Calculate the holding period return on a before-tax basis : Mary and Nick Stalcheck have an investment portfolio containing 4 investments. It was developed to provide them with a balance between current income and capital appreciation. Calculate the holding period return on a before-tax basis for each of thes..
Quantification of decision rules in a healthcare environment : What do you consider to be the key issues for quality improvements in the NHS quality-improvement program as it goes forward? What do you consider to be the strengths and weaknesses of the effort to improve the development of QOF indicators over the ..
Axis of the figure and intercept for market security line : The risk-free interest rate 2% and the mean return on the market portfolio of risky assets is 8%. You are analyzing three individual stocks. The first has a mean return of 5.5% and a beta of 0.5. The second has a mean return of 6.5% and a beta of 0.7..

Reviews

Write a Review

Financial Management Questions & Answers

  General business issues

Advice for Dealing with Business Problems

  Use and ultimate sale of their primary residences

What are the three primary tax benefits homeowners enjoy in their purchase, use and ultimate sale of their primary residences?

  Problem 1pre-contribution balance sheets and fair

problem 1pre-contribution balance sheets and fair valuesjune 30 20x9in thousands of

  What is the effect on the terms of the contract

A trader has a put option contract to sell 100 shares of a stock for a strike price of $650. What is the effect on the terms of the contract of:

  Logic for a price increase from starbucks perspective

Starbucks in 2004 announced that it will increase prices at its stores before the end of year. Analysts expect prices to rise by 4% to 5%. Prices are going up to adjust for increases in dairy products and rents. The firm is seen as the clear leader i..

  Sources of cash

Which of the following are sources of cash?

  Investor has created a hedge-using appropriate terminology

An investor has been following MSFT since its inception. He was an employee of the company for many years but does not own stocks or options in any company. He is concerned that the value of MSFT will unacceptably decline below $30. He therefore buys..

  What amount should be used as upfront cost for this project

Fluffy purchased a lot 6 years ago at a cost of $402,000. Today, that a lot has market value of $440,000. At the time of the purchase, the company spent $35,000 to level the lot and another $40,000 to install storm drains. The company now wants to bu..

  How and why does working capital affect the incremental cash

How and why does working capital affect the incremental cash flow estimation for a proposed large capital budgeting project?  Explain

  Identify the key risks in the project

Identify the key risks in the project and how they might be mitigated - Apply capital budgeting knowledge and entry level skills to a real decision made by a real company.

  Developed a financial retirement strategy

He presently has $150,000 in a retirement account that will be re-invested in a stock fund that has historically earned 10% annually (EAR) with no dividends. The plan is to add an additional $1,000 to the fund at the end of each month for 15 years. H..

  Considering the purchase of a share of alfa growth

You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect to sell it at the end of one year for $55.35 per share. You will also receive a dividend of $2.30 per share at the end of the next year. If your required return..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd