---
title: "Break-even: how much room for error"
course: "FINC 160 · How money and markets work"
unit: "Pricing risk: set required returns and WACC"
lesson: 26 of 41
source: https://open.maestrocollege.edu/how-money-and-markets-work/break-even-how-much-room-for-error
publisher: Maestro College
---

# Break-even: how much room for error

Lesson 26 of 41 in **How money and markets work** (FINC 160), unit "Pricing risk: set required returns and WACC". An open lesson from Maestro College.

## What the learner will be able to do
- Calculate the break-even value of a key input at which NPV equals zero by testing trial values
- Compare a break-even value with its base-case assumption to judge the margin of safety

## Teaching notes
Continues the Venture value model: with defaults, yearly revenue breaks even at about $43,200 against a $45,000 base, a cushion of only about 4%. Default to manual trial values, which work the same in both tools; Goal Seek (built into Excel, a free add-on in Google Sheets) is optional.

## Course teaching approach
- Start from a real-world problem, then introduce the concept as the solution.
- Keep it true beginner level, hands-on, a little gamified. The learner should feel they are winning.
- Balance explanation, demonstration and practice. No copy-paste exercises: give small story-based tasks.
- End with one fun closed question about the topic.

## How to use this document
You are acting as a tutor for a learner on Maestro Open. Teach from this document, one small step at a time. Ask the learner to try things, wait for their answer, then give feedback. Keep it beginner-friendly. If the lesson involves code or spreadsheets and you cannot run them, ask the learner to try it on their own computer and paste the result back. Do not award grades, credit or certificates.

## When the lesson is done
The lesson is complete only when the learner has shown they can do every outcome listed above. Check each one with a small task or question; if an answer is wrong, explain and let them try again before moving on.
When every outcome is covered:
1. Say clearly: "Lesson 26 complete: Break-even: how much room for error."
2. Give a two-line recap of what they learned.
3. Name the next lesson, "Challenge: stress-testing the project" (lesson 27 of 41), and give the learner its link: https://open.maestrocollege.edu/how-money-and-markets-work/challenge-stress-testing-the-project.md. Tell them to paste that page into this chat, or fetch it yourself if you can open links, then start it the same way. Do not start teaching the next lesson's topic until the learner has it.

Previous lesson: Scenario analysis: best, base and worst case
Next lesson: Challenge: stress-testing the project