Question

The owners of a small manufacturing concern have hired a vice president to run the company with the expectation that he will buy the company after five years. For the first $150,000 of profit, the vice president's compensation is a flat annual salary of $50,000 plus 60% of company profits. Beyond the first $150,000 in profits, the vice president's compensation is the salary he receives at $150,000 profit plus 20% of company profits in excess of $150,000. On the following graph, use the purple points (diamond symbols) to plot the vice president's salary as a function of annual profit, for the profits levels of $0, $50,000, $100,000, $150,000, $200,000, $250,000, and $300,000. ? 250 225 Total VP Salary 200 175 150 125 100 25 50 100 150 200 250 300 ANNUAL COMPANY PROFIT (Thousands of Dollars) MANAGER SAL ARY (nousands

Answer 1

Solution for geo retit,vP salay- Soo00 At Profit So000, salary Soo0o t Soo00x 60 ool $8000o pafit 10Do00 At salary VP SoooD + loo000X 60 1O000 At salary profit = 150000 VP Goo0o IS000D X 60 rafir At 200000 salary 140000 DoooX 2O At Pofit 2500co, vf salary: $160 000 Profit4300000, ve salary: At 270000

200 175 150 1-25 100 75 50 25- Company profit(thousands of dollars) 100 -50- 200 250 300 150 Manager salary (thousands of dollars)|

200 175 150 1-25 100 75-7 60 25- Company profit(thousands of dollars) 100 -50- 200 250 300 150 Manager salary (thousands of dollars)|