Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Basic Finance Expert

Two firms, A and B, both produce gadgets. The price of gadgets are $2 each. Firm A has total fixed costs of $1,000,000 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 __________.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M944892

Have any Question?


Related Questions in Basic Finance

Franks is looking at a new sausage system with an installed

Franks is looking at a new sausage system with an installed cost of $375,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped ...

What are the top 5 dos and donts regarding e-portfolio each

What are the top 5 "do's and don't's regarding e-portfolio? each one of your 5 do's and don't's from your perspective and how it affected your authoring your e-portfolio content and construction. i need some help I;m doi ...

The books definition of financial leverage is nbspthe use

The Books definition of financial leverage is "  The use of debt in a firm's capital structure is called  financial leverage . The more debt a firm has (as a percentage of assets), the greater is its degree of financial ...

Consider a project to supply detroit with 28000 tons of

Consider a project to supply Detroit with 28,000 tons of machine screws annually for automobile production. You will need an initial $5,100,000 investment in threading equipment to get the project started; the project wi ...

Your company has an opportunity to invest in a project that

Your company has an opportunity to invest in a project that is expected to result in after-tax cash flows of $16,000 the first year, $18,000 the second year, $21,000 the third year, $24,000 the fourth year, $28,000 the f ...

You have joined up with two partners george and joe to

You have joined up with two partners, George and Joe, to start a new computer equipment distributorship. Each partner invested $50,000, and you have been elected to actively manage the business. George is not active in t ...

What is net present value in terms of evaluating a project

What is Net Present Value in terms of evaluating a project? What is better NPV or Internal Rate of Return when evaluating?

Xyz stock price and dividend history are as

XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End   2010 $ 122               $ 5                      2011 132               $ 5                      2012 $ 110   ...

What is marketing discipline what is most peoples

What is marketing discipline? What is most people's perception of marketing discipline? Name an organization that has done a great job marketing. What did they do to make you feel this way?

Question - congratulations today is your 20th birthday but

Question - Congratulations! Today is your 20th birthday, but you are broke. You just started working full-time, earning $50,000 per year. Your goal is to have $10 million by your 65th birthday (i.e., 45 years from today) ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As