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    Breakeven Number of Gadgets

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    Firm B produce gadgets. The price of gadgets is $2 each. Firm B has total fixed costs of $300,000 and variable costs of $1.40 per gadget. The corporate tax rate is 40%.

    What is the breakeven number of gadgets B must sell to make a zero after tax profit?

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    Solution Summary

    The solution determines the break-even number of gadgets B must sell to make a zero, after-tax profit.