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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. |
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