when contribution is negative, then how to calculate PV ratio?
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Answer Posted / gulzar singh
lets understand with this exemple
Sales = 10, Variable cost= 3, Fixed cost = 3,
Sales = 10
less Variabled cost = 3
C0ntribution (10-3) = 7
less fixed cost = 3
profit = 4
Contriburion only negetive when Variable cost is more then
sales.
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