Long run operation is all about on how to manage the Capital budgeting as well as the Capital expenditures, when we say capital budgeting it is all about on how we are going to plan and to control the capital expenditures. and the Capital Expenditures is how we are going to lessen the cost and increase the income of the long term. This is the most important thing for us to know the flow of long run operations. BREAK-EVEN POINT-VARIABLE AND FIXED EXPENSES
When we say break even point it is the point where the sales income and the variable expenses are equal. The variable expenses is not fixed because sometimes it increase and it decrease example of this are the materials and labor cost, and Fixed expenses is the expenses which is fixed and it remain constant example of this are rent and salaries.
TIME VALUE OF MONEY
It is the value of money in the future its either in the form of productive assets such as equipment or they place in their money in interest-bearing like savings.
The amount of the money should expect in the future. And it is all about the capital or principal and the interest of the money.
PRESENT VALUE It is the present value of money for us to know how much we need today to purchase the certain item in the future.
ANNUITY It refer the first cash that we pay in the certain loans, annuities is usually or commonly involve in pensions or other personal loans.
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