As a new entrepreneur,Anthony's magic number for 2013 is $42,000.If the current tax rate for his business is 30 percent,calculate the amount that Anthony's firm would need to sell for him to get his magic number.
A) $50,000
B) $50,495
C) $60,000
D) $60,854

Question

Quizplus · Accepted Answer

To achieve a net income (magic number) of $42,000 with a tax rate of 30%, Anthony's firm needs to earn more than $42,000 before taxes. The calculation is $42,000 / (1 - 0.30) = $60,000. This accounts for the 30% tax deducted from the total revenue to leave Anthony with his desired $42,000.

As a New Entrepreneur,Anthony's Magic Number for 2013 Is $42,000