Question: A company is considering two different proposals for computing the bonus for its new company president. The first plan states that the bonus would be

A company is considering two different proposals for computing the bonus for its new company president. The first plan states that the bonus would be equal to 6% of profits after the bonus but before tax have been deducted. The second method is based on profits after both tax and bonus have been deducted, at the rate of 12%. Income before income tax and bonus for 2021 is P 9,000,000. Income tax rate is 35%.

• How much is the amount of bonus under the first plan?

• How much is the amount of bonus under the second plan?

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