Question

are bank loan payments included in break-even analysis ?

Answer 1

YES,BREAK-EVEN ANALYSIS IS INCLUDED IN BANK LOAN.BREAK-EVEN ANALYSIS IS THAT POINT OF REVENUE MUST GENERATE IN ORDER TO EQUAL TO ITS EXPENSES. AT THIS POINT THERE IS NO LOSS NO PROFIT.

BREAK-EVEN ANALYSIS =FIXED COST/MARGINAL CONTRIBUTION PER UNIT

IN BANKING IT IS THE POINT WERE BANKS EARN NO LOSS NO PROFIT. SINCE BANK IS SERVICE SECTOR,INSTEAD OF PHYSICAL PRODUCTS THEY PROVIDE DEPOSITS AND LENDING.BREAK-EVEN ANALYSIS =FIXED COST

ASSUMPTIONS

1.VARIABLE COST IS INTERST FOR DEPOSITS

2.FIXED COST ARE THOSE COST WHICH DO NOT VERY

3.SELLING PRICE IS LENDING INTERST RATES

THEREFOR,

BREAK-EVEN ANALYSIS =FIXED COST/LENDING COST-DEPOSIT COST