Chapter Objectives
On completing this chapter, you should be able to:
• Make estimates of future performance.
• Perform break-even analyses.
Break-Even Analysis
With a marketing mix determined, we can take our first look at the financial prospects for the venture. While many people are uncomfortable with the “guesswork” involved in projecting sales and expenses for a prospective business, there are approaches that at least yield structured guesswork, like the marketing research estimates earlier. In any case of predicting future events, there is no right answer, and if we are careful our judgment is as good as anyone’s on our own business concept.
Break-even analysis is a good way to develop a sense of the feasibility ...
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