If a Firm Manager Has a Base Salary of $100,000

question 109

Multiple Choice

If a firm manager has a base salary of $100,000 and also receives 5 percent of all profits,what percentage of his/her final income will be from a profit-sharing plan when profit equals $1,500,000?

• A) 51 percent
• B) 27 percent
• C) 43 percent
• D) 48 percent

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Definitions:

Operating Income

The profit earned from a firm's core business operations, excluding deductions of interest and taxes.

Operating Revenues

The income earned by a company from its normal business activities.

Operating Expenses

The costs associated with running the core operations of a business that are not directly tied to the production of goods or services, such as rent, utilities, and salaries.

Operating Expenses

Costs incurred in the day-to-day operations of a business, excluding costs related to producing goods or services.