Which of the Following Is an Appropriate Method for Calculating

question 51

Multiple Choice

Which of the following is an appropriate method for calculating the financial impact on the firm that results from the loss of a key employee?

• A)research comparable salaries on employment data websites
• B)never let these employees be in the same building at the same time
• C)a multiple of the key person's salary
• D)calculate the net present value of the future salary owed to the employee under his/her existing employment contract.

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Definitions:

Future Value

The value of an asset or amount of money at a specific date in the future, adjusted for factors like interest or inflation.

Market Rate

The interest rate available to most borrowers in the financial market, applied to loans or savings products.

Expected Profit

The forecasted or anticipated earnings from an investment or business activity, considering potential risks and returns.

Current Cost

The price that would be paid for goods or services if purchased in the current market, as opposed to historical cost.