Suppose a Firm Manager Has a Base Salary of $50,000

question 96

Multiple Choice

Suppose a firm manager has a base salary of $50,000 and earns 2.5 percent of all sales.Determine the manager's income if revenues are $20,000,000 and profits are $5,000,000.

• A) $50,000
• B) $175,000
• C) $550,000
• D) $700,000

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Definitions:

Excess Cash

The amount of cash a company possesses that exceeds the minimum level needed to maintain its operations and investment plans.

Brokers' Commissions

Fees paid to brokers for their role in facilitating transactions, such as buying or selling securities, real estate, or insurance products.

Temporary Investments

Assets purchased with the intention to be sold in the short term for profit, such as stocks or bonds, not intended for long-term holding.

Held-to-maturity Securities

Financial instruments that an investor intends and is able to hold until maturity, carrying fixed or determinable payments and fixed maturity.