We consider a simple investment project with the following parameters: I>0:Initial investment which is amortizable in n years; n: Number of years theinvestment allows production with constant output per year; A>0: Annualamortization (A=I/n); Q>0: Quantity of products sold per year; Cv>0: Variablecost per unit; p>0: Price of the product with p>Cv; Cf>0: Annual fixed costs;te: Tax of earnings; r: Annual discount rate. We also assume inflation isnegligible. We derive a closed expression of the financial break-even point Qf(i.e. the value of Q for which the net present value (NPV) is zero) as afunction of the parameters I, n, Cv, Cf, te, r, p. We study the behavior of Qfas a function of the discount rate r and we prove that: (i) For r negligible Qfequals the accounting break-even point Qc (i.e. the earnings before taxes (EBT)is null) ; (ii) When r is large the graph of the function Qf=Qf(r) has anasymptotic straight line with positive slope. Moreover, Qf(r) is an strictlyincreasing and convex function of the variable r; (iii) From a sensitivityanalysis we conclude that, while the influence of p and Cv on Qf is strong, theinfluence of Cf on Qf is weak.
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