These notes provide a detailed explanation of break-even analysis, covering the concept and its importance in financial decision-making. They include essential formulas for break-even calculations, along with clear and well-labeled graphs to visually understand the analysis. The notes feature easy-...
ENGINEERING COSTS
CONCEPTS
AND
COST ESTIMATING
MODELS
• Engineering Economy, William G. Sullivan, Elin M. Wicks, C.
Patrick Koelling; chapter 2 & 3
• Engineering Economic Analysis, Donald G. Newnan, Ted G.
Eschenbach, Jermo P. Lavelle; chapter 2
, Break-Even (B.E) Analysis
A break-even analysis is a financial tool which help
determine the stage at which the company, or a new
service or a product, will be profitable.
In other words, it is a financial calculation for determ
the number of products or services a company shou
sell or provide to cover its costs (particularly fixed co
B.E Quantity (output level) is the relationship betw
Total Revenue and Total Cost and used as decis
making variable.
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