Can someone please explain the break even calaculation?How is it 15 years?
Can someone please explain the break even calaculation?How is it 15 years?
Hello Ameja,
Can you specify what are your doubts?
I will try to clarify the solution dividing the calculation in 4 steps, (you can have a look at the graph in the bottom):
Feel free to contact me for further discussion.
Hope it helps,
Luca
Yes, so after the 5th year he will start to earn money! The Profit will be appx. 5,000€, if you deduct the 30,000 profits from the initial stock, there is left 50,000 of the investment (appx 80,000 - 30,000= 50,000)! So, he needs 10 years to break even + the first 5 years, in total of 15 years!
Can you be more specific on your question?
It is 15 years as the cumulative profit turns from negative to zero in year 15.