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What is the value of maintaining a margin of safety

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Question - Annabelle wants For Rover's Sake to increase its profits, as does everyone working for the company. After all, more profit means success, and success means job security and the potential for raises and bonuses for employees.

The break-even point will tell Annabelle at what point For Rover's Sake will have equal revenues and costs. She calculates costs as $900,000 and revenue as $750,000.

What is the value of maintaining a margin of safety and why a break-even point is important in this scenario as well as any business equation.

Reference no: EM132596999

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