ABC LtdGenerated One Million Canadian Dollars in Profits This Year

question 34

Multiple Choice

ABC Ltd.generated one million Canadian dollars in profits this year.ABC Ltd.decides to place 200,000 Canadian dollars (20 percent of pre-tax profits) in a bonus pool.In previous years,this figure has ranged from zero to 50 percent of pre-tax profits.What type of formula is ABC Ltd.using to determine contributions into the pool?

• A) fixed percentage
• B) fixed threshold
• C) discretionary
• D) percentage approach

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