Break Even Analysis

The above breakeven analysis of each variable displays the combination of the variables that result in a break-even position for the Beta project at rudiment Corporation. For example, the 6% megascopic revenue growth rate would result in a break-even for the project if the operating expenses grow at 8%. Other ratios are derived from sales and operating expenses so that their growth rates are also reflective of the critical rates below these rates, the break-even would be violated.The forecasts of the variables depict the estimates made by first principle Corporation for each of the variables in the context of market information and judgment. In this case, all of the set are above the critical value thus it has to be re-calculated whether the combination results in a break-even or not. For example, the operating expenses growth rate increased by 46. 7% while sales growth rate was up by only 14. 3%. The balancing factors have to re-evaluated in order to deduce whether the break-eve n is achieved or not.This can be done by adding up the values in the %change column assigning a positive to sales/revenue increases and a negative to cost heads. b. Which variables are most critical to the triumph of the beta project? (2 points) There are two methods of judging the critical factors to the success of this project one would be to compare the critical values of the dissimilar variables while the other would be find the variances of each of the percentage changes in the values of different variables.Following the first method, it would lead to the conclusion that the gross profit allowance account is the most critical factor having a 28% critical value. Following the second method, the operating expenses would be the most critical variable. The justification for each of the methods stands sensible in their grounds. However, for this project, it would be more suitable to state that the operating expenses is the most critical factor followed closely by the base sales for 2008 and then the gross profit margin. c. Why would it be helpful to know which variables are most critical to the success of the project?(5 points) Projects often fail when managers and controllers spend time and specie on processes covering variables that are of little importance. Understanding the critical factors of a project helps project managers to focus on the processes that are relatively more primal and achieve targets that would satisfy the critical limits of the variables. Essentially speaking, critical variables should be known in order to make decisions as the project progresses and decide where and when to make changes that would run the critical variables (and how will it affect the