Show calculations to support your answer.
Annual Inflow $660k
- Annual Outflow -$160k
Profit per year $500k (over 20 yrs)
- 40% income tax -$200k
Profit after tax $300k displayed 300 characters
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Facts: Cost of one lift $2 million
Prep & install $1.3 million
Running the new lift $500 a day for 200 days
Cash expenses per skier $5
Lift tickets $55 a day
The lift will allow 300 additional skiers on the slopes, but there are only 40 days a year when the extra capacity will be needed.
The new lift has an economic life of 20 years... displayed next 300 characters
Determine the annual break-even point, in number of haircuts.
Break Even Analysis Definition
"Break Even Analysis refers to the calculation to determine how much product a company must sell in order to break even on that product...
Sole traders (business owed by 1 person) and larger companies need to do this to show tax and shareholders. It also helps the business to asses their financial position, so they can see if they are making a profit or loosing money...
Without careful monitoring of the cash flow, the business may not have the profit realization as they scheduled it. Appropriate actions must be done to prevent such incidents or it may run the business into bankruptcy...
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