Ivan Company Has a Goal of Earning $70,000 After-Tax Income

question 172

Multiple Choice

Ivan Company has a goal of earning $70,000 after-tax income. Ivan would need to pay $20,000 of income taxes at the target level of income. The contribution margin ratio is 30%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?

• A) $23,333.
• B) $36,000.
• C) $300,000.
• D) $353,333.
• E) $420,000.

Understand the key traits and characteristics critical for entrepreneurial success.

Comprehend the impact of globalization on entrepreneurship.

Recognize the demographic and economic trends affecting entrepreneurship.

Identify how information technology supports entrepreneurial ventures.

---

Definitions:

Federal Funds Market

A financial market that allows banks to borrow or lend reserves overnight to meet reserve requirements.

Excess Reserves

Assets retained by banks exceeding the compulsory minimum reserves stipulated by central bank regulations.

Deposits

Money placed into a financial institution for safekeeping, which can earn interest over time depending on the type of account.

Reserves

Assets kept on hand by a bank, company, or government to meet future liabilities, emergencies, or regulatory requirements.