The profit in 2012 must be 4.5(in hundreds of dollars) to break even.
Profit for a company is defined as the difference between the revenue and cost of a product.
Let us take an example to learn more about profit.
A company sells a product at a price of 'S' dollars and the company spends 'C' dollars to manufacture the product. Here C includes the cost of raw materials, labor cost, transport etc.. Now the net profit for the company for selling one unit of this particular product is given by
Profit=S-C
- When S>C the profit is positive.
- When S<C the profit is negative or loss .
- When S=C then the company breaks even.
In the given chart it is shown the profit of the company is given as
2.5,1.75,-3.3 and -1.4 (in thousands of dollars) over 4 years.
Net profit over four years=[tex]2.5+1.75-3.3 -1.4=-0.45[/tex]
So over the past four years the company incurred a loss of
[tex]=0.45\times 1000\\[/tex]
[tex]=450[/tex] dollars
Now the company needs to break even in 2012.
So net profit must be zero over 5 years.
Therefore Profit in 2012=0-(-450)=450 dollars
Profit=4.5 (hundreds of dollars)
To learn more about net Profit:
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