investment decision calculations Flashcards
How can we calculate the yearly profit?
profit per procedure x number of invoiced procedures per year
How can we calculate the Profit per procedure?
Selling price excluding VAT - Total Cost
How can we calculate the return on investment?
= Yearly profit/equipment acquisition cost
How can we calculate the Break even point based on units?
Fixed cost / (revenue per unit - variable cost per unit)
How can we calculate the break even point based on dollars?
Fixed costs / contribution margin
How can we calculate the contribution margin?
Price of product - variable cost
What is the break even point?
It is where revenue equals the costs
What is revenue?
Revenue is the money generated from normal business operations, calculated as the average sales price times the number of units sold. It is the top line (or gross income) figure from which costs are subtracted to determine net income. Revenue is also known as sales on the income statement.
