Question

20 Help Save & Exit Submit Check my work OceanGate sells external hard drives for $280 each. Its total fixed costs are $40 million, and its variable costs per unit are $230. The corporate tax rate is 30% of the economy is strong, the firm will sell 2 million drives, but if there is a recession, it will sell only half as many a. What will be the percentage decline in sales if the economy enters a recession? 9:45) Percentage decline in sales inces b. What will be the percentage decline in profits if the economy enters a recession? Percentage decline in sales < Prev 6 of 17 !!! Next > @ 9 $ 6 and Windows @ 7

Answer 1

a) selling price for each drive - $280 Sales an drives - 2 million Total sales an d - 2 m x $280 s $560 If there as a recession it will sell only half as many Sales an derives - 1 million? Selling price - $280 Total sales an $ - InDx8280 O $ 280 Percentange decline in sales = $280-$560x1000 $560 = -50% $560 - ($460) B Sales an $ variable cost $230x 2 m) contribution TG fixed cost Profit $ 100 Couo $60 >

af economy enters a recession gel Sales ans - 3 28.00 variable costs - ($ 230) osc $230 x 1 ) a do contribution $50 Le fined cost- & uol 11. Net profit . $10 b percentage of decline in profit e $ 10 $ 60 XLOO 0 $ 60 & 83.33010