Calculate firm after tax profit if the economy is strong

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Reference no: EM131993240

Two firms, A and B, both produce brushes. The price of brushes is $2.05 each. Firm A has total fixed costs of $467,000 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 1,509,350 brushes. If the economy enters a recession, each firm will sell 980,000 brushes. Calculate Firm A's after tax profit if the economy is strong.

Reference no: EM131993240

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