The answer is Contribution Margin.
What is break-even point?
A transaction or investment's breakeven point (break-even price) is established by comparing the market price of an asset to its initial cost; the breakeven point is reached when the two prices are equal. In business accounting, the breakeven point is calculated by dividing the entire fixed costs of production by the revenue per unit less the variable costs per unit. Those expenses that don't fluctuate regardless of how many units are sold are referred to in this context as fixed costs. The production level at which all sales for a product net the same amount of money as all expenses is known as the breakeven point.
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Answer:
Higher prices.
Explanation:
Expansionary monetary policy seeks to grow the economy by increasing the money supply, lowering interest rates, and stimulating demand. As we know from the supply/demand curves, higher demand leads to higher price levels.
Purchasing inventory increases your accounts payable and the inventory balance. Trade payables are part of current liabilities and inventories are part of current assets. Both the balance of current assets and current liabilities will increase and the net effect on working capital will be zero. Therefore, working capital remains the same.
Cash in bank accounts and cash, including unpaid customer checks. Securities such as US Treasury bills and money market funds. A short-term investment that the company plans to sell within one year. Accounts receivable are less a provision for accounts receivable that are unlikely to be paid.
In short, working capital is the money available to meet current short-term obligations. To ensure your working capital is working effectively, you need to calculate your current situation, anticipate your future needs, and consider how to ensure you always have enough cash.
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