Hi
Hi, Why are we referring to “contribution” in sales volume and not change in units. As for Units, it should 12.9% change. because 2.21 % of 15000 is 331.5 units and 331.5 * 2.75 (contribution) 911.6 in contribution, not the figure we require for NPV to fall to 0.
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2y ago2y ago#15328/2.75= 1937 units, a change about 13% of 15000 units , ?
2y ago#2Sales volume is another way of saying sales units
NPV /PV of what is uncertain
So I agree
It’s 5328 NPV
But what are we uncertain about is volume, so what cash flows are affected by volume - that is revenue and variable costs
So we need PV of contribution
So 5328/ 241189 * 100 = 2.21%
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