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Break even calculation


Discuss Break even calculation within the Financial Management ( FM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; Chart Tech.Ltd. is evaluating a project costing Rs.10,00,000. The economic life of the project is 5 years and will salvage ...

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Break even calculation
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Jignesh Joshi
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Break even calculation - May 15th, 2012

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
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Farhana Khan
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Re: Break even calculation - May 15th, 2012

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Originally Posted by jigs1980 View Post
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 ?

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Rose Marry
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Re: Break even calculation - April 18th, 2016

Quote:
Originally Posted by jigs1980 View Post
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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File Type: pdf Study on Unit Cost Calculations and the Break Even.pdf (55.5 KB, 0 views)
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