Break Even Analysis Writing Assignment: From the Front Lines

Break Even Analysis
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Break-even point in finance or economics, basically means that particular figure whereby both the expenses and the profits cancel out or balance. In other terms, at this point, there is no net profit or gain (Gapenski, 2007).The central discussion in this paper will be to expound more on this concept of break-even analysis, through the use of the respective exercises provided. This will particularly focus on the consequences of the various reimbursements, while go the extra distance to brainstorm on how the capital proposal might utilize this concept of break-even points or analysis. Section 6.2, as per the assignment, will also be used as the solid example, through the use of a spreadsheet to illustrate the computation of break-even points.
Questions and Answers
* Using the example of “From the Front Lines” in Chapter 6 of your text, calculate the break even for the number of procedures.
Answer:
The general formula in this case is: V = TFC/ (ANR-AVC).
Substituting the numerical values into the above equation:
1,700,000/ (710.00-175.00)
This gives the result of the computation as: 3,177.570093.
In other terms, 3,177.570093 procedures would be required for the process to break even.
* Use an electronic spreadsheet to show how you computed the break even and embed the spreadsheet in your paper.
Answer:
The data to be keyed into the spreadsheet in this case include all the variables that would affect the overall computation. These are: total fixed costs, average net resident revenue, and average variable costs, which in a nutshell, are in the definition of, or are used in the real computation of break-ev...