2.6.

Profitability Analysis
2.6.1. Payback Period
Payback period is the time required for the annual earnings to equal the
original investment. The objective of this method is to calculate the amount of
time that will be required to recover the depreciable fixed capital investment from
the accrued cash flow of a project.
Based on Seider et al. It is defined as:

According to our calculation, the payback period that we get is 1.7 years or
20.4 months. It is a very short time, so it can be promising for investor and bank
to get their money back.
2.6.2. Breakeven Point
Breakeven point (BEP) can be defined as a point or condition where a
company does not obtain profit or loss. In other words, in those situations profit or
loss is equal as zero. That condition can be happened if the operation of the
company uses fixed cost, and the selling volume is enough for covering the fixed
cost and variable cost. If the selling is enough for covering the variable cost and a
pasrt of fixed cost, then the company will incur loss. Otherwise, it will obtain profit,
if the selling can cover variable cost and fixed cost that must be issued.

=


=

(1 )

=
TC is total cost and TR is total revenue. Fixed cost is a kind of cost that
always fixed and not influenced by the selling volume, but influenced with time, so
that this kind of cost will be constant during certain period. Variable cost is a kind
of cost that always changes along with the change of selling volume, where the
change reflected in total variable cost.
 BEP can be achieved based on the payback period. At the time of payback
period, we already sold 17,736 bottle of MaxiBoost. So our BEP is 17,736 bottle.
Basically, we have to sold 17,736 bottle of MaxiBoost to get our BEP, because BEP
is a point where the annual profit can cover the fixed cost.