In 2019, X Company's profit function was 0.31R - $89,000, where R is revenue. In 2020, the relationship between revenue and variable costs will not change, but fixed costs will increase by $16,020. Assuming a tax rate of 35%, what will revenue have to be in order for X Company to earn $33,200 after taxes in 2020?

Revenue= $503,538.46

Explanation:

Giving the following information:

In 2019, X Company's profit function was 0.31R - $89,000, where R is revenue. In 2020, the relationship between revenue and variable costs will not change, but fixed costs will increase by $16,020.

Tax rate= 35%

Desired profit= 33,200

X= 0.31R - (89,000+16,020)= 0.31R - 105,020

We need to incorporate the effect of the tax rate:

X= [(0.31R - 105,020)*(1-t)]

33,200= [(0.31*R) - 105,020]*(1-0.35)

33,200/0.65= 0.31R - 105,020

51,076.92 + 105,020= 0.31R

503,538.46= R

the answer is: guns or butter

hope i

-lavira : )

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