Break-even analysis. This is the point in which revenue (or savings) from the program equals the cost of the program-the time the company has "broken even" on the cost of the training.
Formula = Break-even point = cost/savings * time
*time is the period of time in which the return is being calculated if annually, then 12 months.
A program has an annual cost of $70,000 and is expected to generate in return a savings of $80,000. When would the break-even point occur, given steady savings and costs?
Why is it important for trainers to be able to estimate the ROI, cost-benefit analysis, and break-even analysis? Give three reasons why calculating this information will assist the training endeavours.