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Break-Even Analysis

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Break-even analysis is used in cost accounting and capital budgeting to evaluate projects or product lines in terms of their volume and profitability relationship. At its simplest, the tool is used as its name suggests: to determine the volume at which a company's costs will exactly equal its revenues, therefore resulting in net income of zero, or the "break-even" point.

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Copyright © 2011 Advameg, Inc.