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Author:Shashua, L.
Goldschmidt, Y.
Title:Break-even analysis under inflation.
Journal:Engineering Economist
1987 : WINTER, VOL. 32:2, p. 79-88
Index terms:BREAK-EVEN ANALYSIS
INFLATION
CAPITAL INVESTMENT
Language:eng
Abstract:Break-even analysis under stable prices implies that either a certain percentage of capacity is utilized throughout the period /Model I/ or that capacity is fully utilized for only part of the period under analysis /Model II/. Under inflation, however, when prices of inputs and outputs do not necessarily change at the same rates, these two cases yield different results for break-even volumes. The break-even points under inflationary conditions are found to give smaller volume for Model II than for Model I. Both volumes are larger than in case of stable prices.
SCIMA record nr: 53904
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