Required:

Affiliate $x$ sells $14,000$ units to Affiliate $Y$ per year. The marginal tax rates for $x$ and $Y$ are $20$ percent and $30$ percent, respectively. The

transfer price per unit is currently set at $$1,000,$ but it can be set as high as $$1,250.$ Calculate the increase in annual after$-$tax profits if

the higher transfer price of $$1,250$ per unit is used.

Increase in annual after$-$tax profits