FIL 240 Lecture17Outline of Last Lecture I. Net Present Valuea. Rule b. Relationship between NPV and IRRII. Internal Rate of Return (IRR)III. ProblemIV. Hurdle RateOutline of Current Lecture I. Breakeven Analysisa. Profitb. Revenuec. Costsd. VCe. Profitf. QBECurrent LectureBreakeven AnalysisI. Breakeven Analysisa. Profit = Revenue – Costsb. Revenue = Price x Quantity Soldc. Costs = Variable + Fixed Costsd. Variable Cost = variable cost per unit x quantity solde. Profit = (price x quantity) – (variable cost per unit x quantity) – FCi. Profit = (p-v) x Q – FCf. 0 = (p-v)QBE – FCi. FC/(p-v) = QBEii. FC = $5000iii. VC = $51 per unitiv. P = $175v. QBE = 5000/(175-51) = 41 printsSlope = p-vThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.ProfitBreakeven QuantityFC
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