Final answer:
To achieve a profit of at least 20% on sales revenue with fixed expenses of Birr 24,000, Mr. Y must earn a sales revenue of Birr 30,000, which is not among the provided options. There may be an error in the question or the options given.
Step-by-step explanation:
The question involves calculating the necessary sales revenue to achieve a desired profit margin. Mr. Y wants his profits to be at least 20% of sales revenues, with fixed expenses amounting to Birr 24,000 per year.
To find the sales revenue needed, we first represent the profits as 20% of sales revenue (0.20 × sales revenue). The fixed expenses must be covered by the remaining part of the sales revenue after accounting for profits. Therefore, the equation is set up as:
sales revenue - 0.20 × sales revenue = Birr 24,000
Simplifying, we get:
0.80 × sales revenue = Birr 24,000
Now, to find the sales revenue, we divide the fixed expenses by 0.80:
sales revenue = Birr 24,000 / 0.80
sales revenue = Birr 30,000
Therefore, to achieve a profit margin of 20% with fixed expenses of Birr 24,000, Mr. Y must earn a sales revenue of at least Birr 30,000. However, this number is not among the provided options (A) Birr 120,000, (B) Birr 180,000, (C) Birr 150,000, (D) Birr 200,000. This suggests that there might be an error in the calculation, a misunderstanding of the question, or incorrect options provided, so it is recommended that you clarify the question or the provided options with the student.