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Using breakeven methods to assess financial feasibility in food processing firms: A case study in pecan shelling
Author(s) -
Reid Donald W.,
Musser Wesley N.,
Glover Robert S.
Publication year - 1986
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/1520-6297(198623)2:3<359::aid-agr2720020307>3.0.co;2-n
Subject(s) - economics , econometrics , production (economics) , loan , aggregate (composite) , cash flow , food processing , microeconomics , finance , materials science , composite material , chemistry , food science
Linear and nonlinear cash breakeven analyses are applied to a pecan shelling firm to assess the feasibility of acquiring a long‐term loan for operating capital. The linear analysis is used to find effects of varying volume under average price conditions. The nonlinear breakeven is developed and applied to capture the effects of changing margins due to aggregate production changes. Combination analyses are used to examine effects of changes in market share and aggregate production.