ServerVault Case Study Example | Topics and Well Written Essays - 250 words

ServerVault - Case learn ExampleThe contribution margin shall be the total revenue minus the crash costs per unit. The overhead costs are $50,000. The break even point is thereof the total overhead costs split by the contribution margin. This equals $(50,000/1.300=38). The break even point is so 38 servers. This number is important wedded that it determines the number of units that should be sold to earn a profit. In this case, it is 39 units or more.The key drivers throne money generation on consumption for ServerVault are the security features it offers and it reliability. While the security feature is seven-layered and has thus met the U.S. Department of Defense security standards, the reliability feature results from its use of multiple internet access points. The revenue from the facility is $1,300 as a result of the two drivers. The cash consumption from the premises and the facilities installed is due to the occurrence that ServerVault has not reached its breakeven p oint. Beyond this point, the business would be profitable. With the total number of the servers (Dec-02) at 14,137,000 from a mere 3 in January of 2000, the business is promising. The cash position keeps improving too. From a difference of less than $20,000 in January 2000, the cash position improved to a difference of more than $1.5m in May of the same year.To this end, ServerVault should concentrate on reducing debt while increasing its returns to hit the breakeven point soon enough. This will win the confidence of investors and thus allow for injection of more capital for its