The owners of a small manufacturing concern have hired a vice president to run the company...
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The owners of a small manufacturing concern have hired a vice president to run the company with the expectation that he will buy the company after five years. For the first $150,000 of profit, the vice president's compensation is a flat annual salary of $50,000 plus 60% of company profits. Beyond the first $150,000 in profits, the vice president's compensation is the salary he receives at $150,000 profit plus 20% of company profits in excess of $150,000. On the following graph, use the purple points (diamond symbols) to plot the vice president's salary as a function of annual profit, for the profits levels of $0, $50,000, $100,000, $150,000, $200,000, $250,000, and $300,000. (?) 250 225 Total VP Salary 200 8 175 150 125 100 25 50 100 150 200 250 300 ANNUAL COMPANY PROFIT (Thousands of Dollars) MANAGER SALARY (Thousands of dollars) The owners of a small manufacturing concern have hired a vice president to run the company with the expectation that he will buy the company after five years. For the first $150,000 of profit, the vice president's compensation is a flat annual salary of $50,000 plus 60% of company profits. Beyond the first $150,000 in profits, the vice president's compensation is the salary he receives at $150,000 profit plus 20% of company profits in excess of $150,000. On the following graph, use the purple points (diamond symbols) to plot the vice president's salary as a function of annual profit, for the profits levels of $0, $50,000, $100,000, $150,000, $200,000, $250,000, and $300,000. (?) 250 225 Total VP Salary 200 8 175 150 125 100 25 50 100 150 200 250 300 ANNUAL COMPANY PROFIT (Thousands of Dollars) MANAGER SALARY (Thousands of dollars)
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It is stated that for first 150000 of profit the vice presidents c... View the full answer
Related Book For
Managerial Economics A Problem Solving Approach
ISBN: 978-1305259331
4th edition
Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Posted Date:
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