CVP Analysis
Not what you're looking for?
Paul Scott has a 2008 Cadillac that he wants to update with a geo-tracker device so he will have access to road maps and directions. After-market equipment can be fitted for a flat fee of $500, and the service provider requires monthly charges of $20. In his line of work as a traveling salesman, he estimates that this devise can save him time and money - about $35 per month (as the price of gas keeps increasing).
In order to determine the financial feasibility of purchasing the geo-tracker, Paul wants to determine the number of months it will take to break even. He plans to keep the car for another 3 years.
a. Calculate the break even point for the device in months.
b. Based on a, should Paul have the tracker installed in his car?
Purchase this Solution
Solution Summary
Solution describes the steps to calculate break even point in the given case.
Solution Preview
a. Calculate the break even point for the device in months.
Monthly savings=P=$35 per ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance
These questions will test you on your knowledge of finance.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Introduction to Finance
This quiz test introductory finance topics.