Please help me fix c. Thanks! c. Suppose the government imposes a 25 percent tax on accounting profits. This tax is levied only if a firm is earning positiveaccounting profits. What will your after-tax accounting profit be in the low-revenue case?$ -20,000In the high-revenue case?$ 112,500 *What will your average after-tax accounting profit be?$ 48,750What will be your average after-tax economic profit?$ 3,750 8 You are currently a worker earning $60,000 per year but are considering becoming an entrepreneur. You will not switch unless youearn an accounting profit that is on average at least as great as your current salary. You look into opening a small grocery store.Suppose that the store has annual costs of $150,000 for labor, $70,000 for rent, and $30,000 for equipment. There is a one-halfprobability that revenues will be $230,000 and a one-half probability that revenues willI be $400,000.Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) infront of those numbers. Enter a loss as a negative number.a. In the low-revenue situation, what will your accounting profit or loss be?$ -20,000What will your accounting profit or loss be in the high-revenue situation?$ 150,000b. On average, how much do you expect your revenue to be?$ 315,000Your accounting profit?$ 65,000Your economic profit?$ 5,000Will you quit your job and try your hand at being an entrepreneur?Yes

(c) In lower revenue case Total cost = $1,50,000+70,000+30,000 = $2,50,000 Lower…

c. Suppose the government imposes a 25 percent tax on accounting profits. This tax is levied only if a firm is earning positive accounting profits. What will your after-tax accounting profit be in the low-revenue case? $ -20,000 In the high-revenue case? $ 112,500 * What will your average after-tax accounting profit be? $ 48,750 * What will be your average after-tax economic profit? $ 3,750 8

c. Suppose the government imposes a 25 percent tax on accounting profits. This tax is levied only if a firm is earning positive accounting profits. What will your after-tax accounting profit be in the low-revenue case? $ -20,000 In the high-revenue case? $ 112,500 * What will your average after-tax accounting profit be? $ 48,750 * What will be your average after-tax economic profit? $ 3,750 8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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