QUESTION 3 Firm B produces gadgets. The price of gadgets is $2 each. 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 the firm will sell 2,000,000 gadgets. If the economy enters a recession, the firm will sell only half as many gadgets. If the economy is strong, the after-tax profit of firm will be $630,000 $300,000 $210,000 $90,000 QUESTION 8 The ABS company has a capital base of $100 million, an opportunity cost of capital (K) of 15%, a return on assets (ROA) of 9% and a return on equity (ROE) of 18%. What is the economic value added (EVA) for ABS? -54 million 58 million -56 million $3 million