Subject category:
Economics, Politics and Business Environment
Published by:
El-Khazindar Business Research and Case Center (KCC)
Length: 6 pages
Data source: Published sources
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https://casecent.re/p/158335
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Abstract
Breakeven in Business and Economics is a short run analysis concerns with how much does a company produce and sell to cover both variable cost (Cost Goods Sold) and fixed operating cost (Operating expenses including depreciation allowance). In Finance, breakeven analysis concerns with capital budgeting projects (investment projects). It targets whether an investment project generates in its economic life enough free cash flow (FCF) to return to shareholders and debtholders, as the financier of the project, the initial investment which is financed by their provided funds and the estimated return on these funds namely the Weighted Average Cost of Capital (WACC). It is therefore a long term analysis.
About
Abstract
Breakeven in Business and Economics is a short run analysis concerns with how much does a company produce and sell to cover both variable cost (Cost Goods Sold) and fixed operating cost (Operating expenses including depreciation allowance). In Finance, breakeven analysis concerns with capital budgeting projects (investment projects). It targets whether an investment project generates in its economic life enough free cash flow (FCF) to return to shareholders and debtholders, as the financier of the project, the initial investment which is financed by their provided funds and the estimated return on these funds namely the Weighted Average Cost of Capital (WACC). It is therefore a long term analysis.