52
Break-Even Analysis
Break-even analysis is basically a technique for analyzing the
relationships among fixed costs, variable costs, and income. Until the
break even point is reached at the intersection of the total income and
total cost lines, the producer operates at a loss. After the break-even point
each unit produced and sold makes a profit. Break even analysis may be
represented as follows.
200
1700
-628.09 5th year.
200
1700
-226.44 6th year.
200
1700
-309.48 7th year.
200
1700
-388.81 8th year.
300 0
-1,034.72 9th year.
300 0
-1,080.88 10th year.
750
750.00 Buy back.
1 3
390.00 After tax buy back expense.
43
239.43 Present value.
2
-150.49 Net lease advantage.
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