Two firms, A and B, both produce brushes. The price of brushes is $1.70 each. Firm...
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Two firms, A and B, both produce brushes. The price of brushes is $1.70 each. Firm A has total fixed costs of $460,000 and variable costs of 48 cents per brush. Firm B has total fixed costs of $260,000 and variable costs of 72 cents per brush. The corporate tax rate is 35%. If the economy is strong, each firm will sell 1,500,000 brushes. If the economy enters a recession, each firm will sell 985,000 brushes. If the economy enters a recession, what will be the after-tax profit of Firm A? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. After-tax profit IS 786,500.00 Two firms, A and B, both produce brushes. The price of brushes is $1.70 each. Firm A has total fixed costs of $460,000 and variable costs of 48 cents per brush. Firm B has total fixed costs of $260,000 and variable costs of 72 cents per brush. The corporate tax rate is 35%. If the economy is strong, each firm will sell 1,500,000 brushes. If the economy enters a recession, each firm will sell 985,000 brushes. If the economy enters a recession, what will be the after-tax profit of Firm A? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. After-tax profit IS 786,500.00
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