What Is Meant by the Statement "Financial Planning Is Both

question 18

Essay

What is meant by the statement "financial planning is both an art and a science?"

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Definitions:

Break-even Point

The juncture where the sum of all expenses matches the sum of all income, leading to neither a profit nor a deficit.

Variable Expense

Expenses that vary directly with the amount of production or the degree of operational activity.

Contribution Margin Ratio

The percentage of each sale that exceeds the variable costs of production.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.