BA 101 Lecture Notes - Lecture 8: Net Present Value, Fixed Cost, Promotional Mix

• School: University of Oregon
• Department: Charles H. Lundquist College of Business
• Course: BA 101
• Professor: durant

Document Summary

The breakeven point: the point at which costs and sales are equal - there is no net loss and there is no net income. Usually expressed in terms of units you need to sell. Helpful when coming out with a new product. Be (units)= fixed cost / price -variable costs(contribution margin) Total costs= fixed costs + (variable costs x units sold) Total cost = total revenue is the breakeven point. A good starting place for knowing how many units to make. Assumes all products are sold at the same price. It is better to have the money today so you can invest it and inflation will make future payments worth less. The difference between the present value of cash inflows and the present value of cash outflows. Compares the value of a dollar today to the value of that same dollar in the future. Taking inflation (dollar loses value) and dollar returns (dollar increases in value) into account.