Breakeven Price
Categories: Accounting, Company Management
The amount of moolah necessary for the seller of a product or service to cover their costs of providing it, inclusive of any costs incurred while they owned it.
Shinsuke is a robot hobbyist who built his first human-like robot, Lucy, 20 years ago. The project was financed by a $10,000 loan at an annual interest rate of 5%, and she has had about $5,000 worth of work done over the years.
Shinsuke is looking to sell Lucy at a conference for robot enthusiasts next week. He’ll be lucky if Lucy fetches Shinsuke's breakeven price of $37,097.03, all things considered. And he won't even really miss her, because Shinsuke is a robot-like human.