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Why is it important to understand Break-even point in Business Decisions

December 16th, 2010 / No comments yet

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Break-even point is important for business decisions:

As break-even point marks the very lowest level to which activity can drop without putting the life of the company in jeopardy.

By understanding break-even analysis, a firm can decide on which following strategies to use in order to increase profit or decrease loss like:
Increase sale volume
Increase selling price per unit
- Decrease fixed costs
- Decrease variable cost per unit

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