Use break-even analysis to determine

Reference no: EM13256461

You can charge $1,100 for a new service. Demand is anticipated to be 8,000 units a year. Your business is able to handle up to 16,500 units annually, so capacity should not be a problem. The average collection rate is 80%. The new service has annual fixed costs of $5,000,000. Variable cost per unit of service is $480.

Question: Use break-even analysis to determine if this new service is financially viable. If the business is not financially viable, what steps could you take to make a case to proceed with implementation?

Reference no: EM13256461

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