ENTREPRENEURIAL PLANNING
FINANCIAL PLANNING AND ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -This is the point where your total revenue (sales or turnover) equals total costs. At this point there is no profit or loss-in other words, you ‘break even’. Knowing your break-even point can help you make a decision about your selling prices, set a sales budget and prepare your business plan.
Detailed explanation-2: -Break-even (or break even), often abbreviated as B/E in finance, (sometimes called point of equilibrium) is the point of balance making neither a profit nor a loss.
Detailed explanation-3: -The break-even point is reached when total costs and total revenues are equal, generating no gain or loss (Operating Income of $0). Business operators use the calculation to determine how many product units they need to sell at a given price point to break even or to produce the first dollar of profit.