break even
Break-Even Point
Author(s): Satya Prakash Singh and Jayant V. Deshpande
Source: Economic and Political Weekly, Vol. 17, No. 48 (Nov. 27, 1982), pp. M123+M125+M127M128
Published by: Economic and Political Weekly
Stable URL: http://www.jstor.org/stable/4371597 .
Accessed: 01/04/2014 04:34
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Break-Even
Point
Satya Prakash Singh
Jayant V Deshpande
Wheit 'net presenit value of investment/internal rate of retuirnt
(NPViIIIRR) 7hasbeen} callculated for a project to measure its profitability in a comprehensive manner, why is it thzat break-even point (BEP) is also calculated in addition? The requtred calculationts for profitability are made on the assumption of expected level of operations of the project, generally, called 'normal capacity utilisation'. But entrepreneuirs are seldom sure that normal capacity will be utilised in actuial operations. Internal organisational and environmental uncertainties force entrepreneurs to ask: Whiat if the project does not run at the assumed capacity level? Will the project be in a position to at least recover its costs? These risk-induiced questions motivate the calculation of BEP. This paper emphasises tlhat BEP is essentially
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Author(s): Satya Prakash Singh and Jayant V. Deshpande
Source: Economic and Political Weekly, Vol. 17, No. 48 (Nov. 27, 1982), pp. M123+M125+M127M128
Published by: Economic and Political Weekly
Stable URL: http://www.jstor.org/stable/4371597 .
Accessed: 01/04/2014 04:34
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp .
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
.
Economic and Political Weekly is collaborating with JSTOR to digitize, preserve and extend access to
Economic and Political Weekly.
http://www.jstor.org
This content downloaded from 111.68.108.52 on Tue, 1 Apr 2014 04:34:16 AM
All use subject to JSTOR Terms and Conditions
Break-Even
Point
Satya Prakash Singh
Jayant V Deshpande
Wheit 'net presenit value of investment/internal rate of retuirnt
(NPViIIIRR) 7hasbeen} callculated for a project to measure its profitability in a comprehensive manner, why is it thzat break-even point (BEP) is also calculated in addition? The requtred calculationts for profitability are made on the assumption of expected level of operations of the project, generally, called 'normal capacity utilisation'. But entrepreneuirs are seldom sure that normal capacity will be utilised in actuial operations. Internal organisational and environmental uncertainties force entrepreneurs to ask: Whiat if the project does not run at the assumed capacity level? Will the project be in a position to at least recover its costs? These risk-induiced questions motivate the calculation of BEP. This paper emphasises tlhat BEP is essentially
{.