Finance Formulas / July 6, 2018 / Chanel Cleveland
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment, says Avery. If the company doesn’t sell the equivalent of the BEQ as a result of the investment, then it’s losing money and it won’t recoup its costs. If the company sells more than the BEQ then it not only has made its money back but is making additional profit as well.
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. Compound interest is standard in finance and economics.
We Also Think You’ll Like