Falcon Environmental Services, Inc.provides consulting services to power plants.The consulting ﬁrm's contribution-margin ratio is 15 percent, and its annual ﬁxed expenses are $135,000.The ﬁrm's income- tax rate is 35 percent. Required: 1.Calculate the ﬁrm's break-even volume of service revenue. 2.How much before-tax income must the ﬁrm earn to make an after-tax net income of $65,000? 3.What level of revenue for consulting services must the ﬁrm generate to earn an after-tax net income of $65,000? 4.Suppose the ﬁrm's income-tax rate rises to 45 percent.Explain what will happen to the break-even level of consulting service revenue.

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The Answer of Falcon Environmental Services, Inc.provides consulting services to power plants.The consulting ﬁrm's contribution-margin ratio is 15 percent, and its annual ﬁxed expenses are $135,000.The ﬁrm's income- tax rate is 35 percent. Required: 1.Calculate the ﬁrm's break-even volume of service revenue. 2.How much before-tax income must the ﬁrm earn to make an after-tax net income of $65,000? 3.What level of revenue for consulting services must the ﬁrm generate to earn an after-tax net income of $65,000? 4.Suppose the ﬁrm's income-tax rate rises to 45 percent.Explain what will happen to the break-even level of consulting service revenue.