A small company provides an incentive plan for its top executives. Each executiv

Question

A small company provides an incentive plan for its top executives. Each executive receives as a bonus a percentage of the portion of the annual profit that remains after the bonuses for the other executives have been deducted (see the table). If the company has an annual profit of $2 million, find the bonus for each executive.

President

4.10%

Executive vice-president

3.62%

Associate vice-president

3.09%

Assistant vice-president

2.61%

President

4.10%

Executive vice-president

3.62%

Associate vice-president

3.09%

Assistant vice-president

2.61%

Explanation / Answer

President = $2 Million x 4.10% = 82K

Executive Vice-President = $2 Million x 3.62% = 72.4K

Associate Vice-President = $2 Million x 3.09% = 61.8K

Assistant Vice-President = $2 Million x 2.61% = 52.2K

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