Merits of net present value analysis vs breakeven analysis


Question:

Gateway Appliance toasters sell for $20 per unit, and the variable cost to produce them is $15. Gateway estimates that the fixed costs are $80,000. Compute the break-even point in units. After solving this problem, discuss the relative merits of Net Present Value analysis versus Breakeven analysis.

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Finance Basics: Merits of net present value analysis vs breakeven analysis
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