1. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 1 2-6 BREAKEVEN ANALYSIS Determine the breakeven prices and amounts using technology or algebra. OBJECTIVES

2. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 2 zero net difference quadratic formula Key Terms

3. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 3

4. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 4 Example 1 Determine the prices at the breakeven points for the Picasso Paints product in Lesson 2-5. The expense function is E = –3,500 p + 238,000, and the revenue function is R = –500 p 2 + 30,000 p. Determine the prices at the breakeven points for this product both algebraically and graphically.

5. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 5 Example 2 Determine the revenue and expense for the Picasso Paints product at the breakeven points found in Example 1.

6. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 6 How could you have improved on the error when calculating the expense and revenue values? CHECK YOUR UNDERSTANDING

7. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 7 The expense function for a particular product is E = –2,000 p + 125,000. The revenue function for that product is R = –600 p 2 + 18,000 p. Determine the prices at the breakeven points for this product both algebraically and graphically. CHECK YOUR UNDERSTANDING