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    After Tax Profit

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    Two firms, A and B, both produce gadgets. the price of gadgets is $2 each. Firm A has total fixed costs of $1000,000 and variable costs of $1.00 per gadget. Firm B has total fixed costs of $300,000 and variable costs of $1.40 per gadget. The corporate tax rate is 30% If the economy is strong, each firm will sell 2,000,000 gadgets. If the economy enters a recession, each firm will sell 1,000,000 gadgets. If the economy enters a recession the after tax profit of Firm B will be: Choices are

    * $0
    *$90,000
    *$210,000
    *$300,000

    © BrainMass Inc. brainmass.com June 3, 2020, 11:53 pm ad1c9bdddf
    https://brainmass.com/business/accounting/after-tax-profit-306149

    Solution Summary

    This solution goes through accounting concepts such as calculating after tax profits.

    $2.19

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