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Chapter 14. Using Excel's Business-Model... > Performing a Break-Even Analysis

Performing a Break-Even Analysis

In a break-even analysis, you determine the number of units you have to sell of a product so that your total profits are 0 (that is, the product revenue equals the product costs). Setting up a profit equation with a goal of 0 and varying the units sold is perfect for Goal Seek.

To try this, we'll extend the example used in the “Optimizing Product Margin” section. In this case, assume a unit price of $47.95 (the solution found to optimize product margin, rounded up to the nearest 95¢). Figure 14.15 shows the Goal Seek dialog box filled out as detailed here:


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