Break Even Analysis: A Change in Variable and Fixed Costs
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The aim of these question is to interpret the consequences of an increase fixed costs and a decrease in variable costs on the break-even point.
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The company that maintains the ship has offered to replace the current engine with a more recent model (Ship Maintenance (£ year) increases by £12,000). They propose that this would make the ship more efficient and therefore, less dependent on fuel (Sensitivity to Fuel Price (%) decreases to 62%)
Comment on the impact on the firm; its profits, break-even mileage and the new margin of safety.; 
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