Define Break-Even Time (BET)and Describe How It Works

Define Break-even time (BET)and describe how it works.Include any limitations from using this approach.
Break-even time (BET)is the length of time required to recover the investment made in new-product development.It is important to identify the relevant cash flows in break-even time analysis.The relevant cash flows are the differential future cash inflows and outflows that change as a result of introducing the new product.Overhead costs are irrelevant if adding a new product only changes the way overhead is allocated without changing the total cash outflow for overhead costs.Break-even time analysis should also include both positive and negative cash-flow effects that the new product may have on sales of existing products.