A Company Is Thinking of Switching from Independent Sales Agents

question 48

Multiple Choice

A company is thinking of switching from independent sales agents to hiring its own sales force. If 10 salespeople were hired, they would be paid a 3% commission on sales plus a salary of $20,000 each. Independent sales agents are currently paid a commission of 5% on sales. At what sales volume is the company economically indifferent about which sales organization to use in a selling situation?

• A) $1,000,000
• B) $2,500,000
• C) $10,000,000
• D) $25,000,000

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Definitions:

Pollinators

Animals or insects that transfer pollen from one flower to another, facilitating plant reproduction.

Megaspore

A type of spore in some plants that develops into a female gametophyte, distinguished by being larger than other types of spores, such as microspores.

Female Gametophyte

The gamete-producing structure in plants and algae that develops into the female gamete.

Embryo Sac

Female gametophyte (megagametophyte) of flowering plants.