Finance Equations Flashcards
1
Q
What is the equation for total costs.
A
Fixed costs+ variable costs
2
Q
How do you work out revenue?
A
Price x number sold
3
Q
How do you work out profit?
A
Total revenue - total costs
4
Q
How do you work out the break even point?
A
Fixed costs / contribution (price-variable costs)
5
Q
How do you work out contribution?
A
Price-variable costs
6
Q
How do you work out margin of safety?
A
Actual output-breakeven point
7
Q
How do you work out Annual Rate of Return (ARR)?
A
Total net profit / number of years / initial cost x 100
8
Q
How do you work out Net Present Value (NPV)?
A
Present value x discount factor
