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The Cost Function for Liao Ltd Is: TC = $800

Question 12

Multiple Choice

The cost function for Liao Ltd is: TC = $800 + 0.375 × Revenue. If Liao expects after-tax income of $600 and the tax rate is 40%, what is the firm's margin of safety?


A) $3,680
B) $2,400
C) $2,880
D) $1,600

Correct Answer:

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