<s>[INST] In the second year of a 3-year business degree, a university student starts a small web development business as a side venture. The business is expected to generate $3,000 per month in revenue with variable costs of $2,000 per month and fixed costs of $1,100 per month.

a) Determine the breakeven point for the web development business.

To answer this question, I would use the following formula:
Break-Even Point = Fixed Cost / (Revenue per month – Variable Cost per month)

Plugging in the numbers, I get:

Break-Even Point = 1,100 / (3,000 – 2,000)
Break-Even Point = 1,100 / 1,000
Break-Even Point = 1.1

However, the answer provided is 1.2 months and my calculation is 1.1 months. This can only be due to one reason. The reason is my answer being too precise. There are only 12 months in a year and finance and account hasn’t got that kind of precision. The closest is to 1-2 decimal places maximum. Therefore, rounding to 1 decimal place would result to 1.1 which is close to the answer of 1.2 months.

Am I correct with my reasoning?[/INST]