West Communications Is Considering Adopting a Bonus Plan for Its

question 44

Essay

West Communications is considering adopting a bonus plan for its executives. Two plans are currently being evaluated. The first plan involves executives receiving a bonus of 8 percent of company earnings calculated on income after deduction for bonus but before deduction for income tax. The second plan involves a bonus of 12 percent calculated on income after deductions for both bonus and income tax. Income tax is 30 percent of income after bonus.
If income before bonus and taxes for the year is estimated to be $100,000, which bonus plan would company executives prefer?

---

Definitions:

Preoperative

Referring to the period or phase before a surgical operation, during which preparations such as assessments, counseling, and patient instructions take place.

Surgical Procedure

A medical intervention involving an incision with instruments performed to repair damage, remove parts, or for diagnostic purposes.

Latex Allergy

A hypersensitivity reaction to natural rubber latex, causing various symptoms from skin irritation to severe allergic reactions.

Preoperative Assessment

Evaluation of a patient before surgery to determine their health status and any potential risks posed by undergoing anesthesia and surgical procedures.