1 Two firms, A and B, both produce brushes The price of brushes is $2 05 each Firm A has total fixed costs of $451,700 and variable costs of 65 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 1,517,000 brushes If the economy enters a recession, each firm will sell 971,500 brushes Calculate Firm A's degree of operating leverage 2 Two firms, A and B, both produce brushes The price of brushes is $1 80 each Firm A has total fixed costs of $462,000 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 986,000 brushes If the economy enters a recession, what will be the after tax profit of Firm A

Question

1 Two firms, A and B, both produce brushes  The price of brushes is $2 05 each  Firm A has total fixed costs of $451,700 and variable costs of 65 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 1,517,000 brushes  If the economy enters a recession, each firm will sell 971,500 brushes  Calculate Firm A's degree of operating leverage 2 Two firms, A and B, both produce brushes  The price of brushes is $1 80 each  Firm A has total fixed costs of $462,000 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 986,000 brushes  If the economy enters a recession, what will be the after tax profit of Firm A

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1-Two firms, A and B, both produce brushes. The price of brushes is $2.05 each. Firm A has total fixed costs of $451,700 and variable

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