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jigs1980 May 15th, 2012 04:42 AM

Break even calculation
 
Chart Tech.Ltd. is evaluating a project costing Rs.10,00,000. The economic life of the project is 5 years and will salvage value thereafter. The variable cost and fixed cost of production are 60% and Rs.3,00,000. P.a. Tax rate applicable to the firm is 30% and the firm does not take a project unless the return is 15%. How much sales revenue it must earn every year to Break Even from different level of:
1. Cash Break even
2. Accounting Break even
3. Financial Break even

farhanak.manage May 15th, 2012 01:04 PM

Re: Break even calculation
 
Quote:

Originally Posted by jigs1980 (Post 470966)
Chart Tech.Ltd. is evaluating a project costing Rs.10,00,000. The economic life of the project is 5 years and will salvage value thereafter. The variable cost and fixed cost of production are 60% and Rs.3,00,000. P.a. Tax rate applicable to the firm is 30% and the firm does not take a project unless the return is 15%. How much sales revenue it must earn every year to Break Even from different level of:
1. Cash Break even
2. Accounting Break even
3. Financial Break even

Doesnt look too difficult. Just need to process data. Seems like it has some discrepancy

10,00,000 is total project cost over 5 years. Whats 60 % variable and how is fixed cost 3 lakhs? At a 3 lakh fixed cost pa, wont the project cost be 15,00,000 ?

:SugarwareZ-064:

rosemarry2 April 18th, 2016 07:30 PM

Re: Break even calculation
 
1 Attachment(s)
Quote:

Originally Posted by jigs1980 (Post 470966)
Chart Tech.Ltd. is evaluating a project costing Rs.10,00,000. The economic life of the project is 5 years and will salvage value thereafter. The variable cost and fixed cost of production are 60% and Rs.3,00,000. P.a. Tax rate applicable to the firm is 30% and the firm does not take a project unless the return is 15%. How much sales revenue it must earn every year to Break Even from different level of:
1. Cash Break even
2. Accounting Break even
3. Financial Break even

Hello friend,

Here I am up-loading Study on Unit Cost Calculations and the Break Even, please check attachment below.


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