consider a poverty application provides a primary benefit of $6,000, zero deductions, and a marginal tax...

question:

believe a poverty application provides a fundamental advantage of $6,000, zero deductions, and a marginal tax price of 0.6. The breakeven level of profits is:

a. $10,000

b. $3,600

c. $6,000

d. $2,400

answer and rationalization:

The destroy-even stage of revenue is choice a, i.e., $10,000.

Given information:

quantity of improvement is $6,000.

Marginal tax rate is 0.60

allow us to anticipate X be the degree of income where destroy-even will also be executed. It may be the place the application advantage is equal to the after-tax revenue. for this reason, X can also be calculated as follows:

eq\beginalign* \$ 6000 &= \rmX\left( 0.60 \right)\\ \rmX &= \$ 10,000 \endalign* /eq