1. What will be the profit after tax if gross sales decline to $ 2.0 million?

2. What would be the change in Federal Taxes if the tax rate changes to 32 percent?

3. Assume that the Federal tax rate is 40% and gross sales total $4,000,000, what would the change be in net income?

4. As in question 3, assume that the Federal tax rate is 40%; but this time, assume that gross sales are only $3,000,000. What will be the change in net income (from the base year, not question 3)?

5. What is the change in net income if the materials cost fraction could be reduced to 20% per year?

6. What would be the change in net income if fixed overhead is doubled?

7. If State taxes triple, what would be the after tax profit?

8. What would the profit (or loss) be if sales dropped to $500,000, and Fixed Overhead increased to $100,000?

9. Assume that the Return Fraction increases to 7%. What would be the Profit after Tax?

10. Assume that every fraction increases by 5% (5 percentage points), and Fixed Overhead is $100,000. What will be the profit after tax?

11. What would be the change in net income if gross sales were $250,000?

Goal-Seeking Questions:

12. What amount would gross sales have to be in order for the company to show zero ($0) profit (the break-even sales point)?

13. What gross sales are needed to generate an after tax profit of $1,000,000?

14. By what amount would gross sales have to fall in order for the company to show a loss of $10,000 - $30,000 (specify the value)?