Income Due to the enormous success of the movie Henrietta’s Heaving Heart based on a novel by Celestine A. Lafleur (see Exercise 103), Boxoffice Success Productions decides to film the sequel, Henrietta, Oh Henrietta. At this point, Bertha Snodgrass (whose novels now top the best seller lists) feels she is in a position to demand $100,000 for the screen rights and royalties of 8% of the net profits. Express her income I as a function of the net profit N and determine the net profit necessary to bring her an income of $1,000,000. What is her marginal income (share of each dollar of net profit)?
Reference:
Income The well-known romance novelist Celestine A. Lafleur (a.k.a. Bertha Snodgrass) has decided to sell the screen rights to her latest book, Henrietta’s Heaving Heart, to Box office Success Productions for $50,000. In addition, the contract ensures Ms. Lafleur royalties of 5% of the net profits. Express her income I as a function of the net profit N, and determine the net profit necessary to bring her an income of $100,000. What is her marginal income (share of each dollar of net profit)?
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