[ncl_123]

TQ

[ncl_123]

The question is about what is the minimum contribution to sales rate in order to achieve NPV = 0

[ncl_123]

Can i answer (a),(b) & (c) together?

[ncl_123]

Thanks for the sharing Jack, this illustrations trigger me more idea on analysis and understanding

[ncl_123]

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?

[Author]

Posts