Answer:
The correct answer is 42.86%.
Explanation:
According to the scenario, the given data are as follows:
Base salary = $100,000
Extra earnings = 5% of all profit
Total Profit = $1,500,000
So, first we calculate the total earning received by the manager.
So, Total Earning = Base Salary + 5% of $1,500,000
= $100,000 + $75,000
= $175,000
Now, we can calculate the percentage of his/her final income from a profit-sharing plan by using following formula:
Percentage of final income = (Share in profit ÷ Total earning) × 100
= ($75,000 ÷$175,000) × 100
= 42.86%
