Purchase Solution

Finance: Break Even Point for Financial Operations

Not what you're looking for?

Ask Custom Question

Problem: (Break-even point) You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find the break-even point in units of output for the firm.

- Return on operating assets = 25%
- Operating asset turnover = 5 times
- Operating assets = $20 million
- Degree of operating leverage = 4 times

Purchase this Solution

Solution Summary

This solution is comprised of a step by step response detailing how to solve each component of this problem. First, we solve for the missing pieces and then we can find the breakeven. Computations are done in Excel for the student.

Solution Preview

See the attached Excel file.

I did this using Excel - Start at the top ...

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Motivation

This tests some key elements of major motivation theories.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.