Business, 05.10.2020 01:01, richellemjordan

1. Break-even analysis To be profitable, a firm must recover its costs. These costs include both its fixed and its variable costs. One way that a firm evaluates at what stage it would recover the invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit. Consider the case of Free Spirit Industries Inc.: Free Spirit Industries Inc. is considering a project that will have fixed costs of $15,000,000. The product will be sold for $37.50 per unit, and will incur a variable cost of $12.80 per unit. Given Free Spirit’s cost structure, it will have to sell

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1. Break-even analysis To be profitable, a firm must recover its costs. These costs include both its...