Cost Volume Profit Relationship Analysis

Problem Solving Training at Chrysler
October 24, 2020
Building a Better MIS-Trap
October 24, 2020

Cost Volume Profit Relationship Analysis

Cost Volume Profit Relationship Analysis

Your company, Diamond Dynamics, is researching whether or not it would be a good decision to invest in new manufacturing equipment that will significantly speed up production time on the assembly line.
However, the total cost of the equipment and installation, not including any maintenance plan, is a hefty investment of roughly $850,000.
In a 500-word description, Explain how a CVP analysis would be useful for determining whether or not the investment is worth it.
Also, explain the limitations of a CVP analysis in this situation and for making managerial decisions in general.