The role that depreciation plays in break-even analysis considering accounting flows and also mention the perspective which goes for the longer term in accordance with cash flows. Introduction: Break-even analysis (BEP): This analysis helps a firm to determine no profit and no loss situation. It also helps to determine the relationship between cost, profit and volume. Cash flows analysis: It is used to assess both activities of cash outflows and inflows of the firms through operating, investing and financing activities.

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Chapter 5, Problem 4DQ

Summary Introduction

To explain: The role that depreciation plays in break-even analysis considering accounting flows and also mention the perspective which goes for the longer term in accordance with cash flows.

Introduction:

Break-even analysis (BEP):

This analysis helps a firm to determine no profit and no loss situation. It also helps to determine the relationship between cost, profit and volume.

Cash flows analysis:

It is used to assess both activities of cash outflows and inflows of the firms through operating, investing and financing activities.

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