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The question is about what is the minimum contribution to sales rate in order to achieve NPV = 0
Thanks for the sharing Jack, this illustrations trigger me more idea on analysis and understanding
From my understanding we do not include any fixed cost as part of contribution calculation although that specific fixed cost is subject to incremental elements
In this case, i have another concerned, while we calculate transfer pricing, when deriving relevant cost – 1) variable cost 2) specific fixed cost 3) opportunity cost
why the second on 2) specific fixed cost is in? Is this because it is not period cost/sunk cost?
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