The maximum salary that Rick can offer a new employee based on the budgeted and current projections is <u>$93.750</u>.
<h3>What is a budget projection?</h3>
A budget projection is qualitative and quantitative data developed for making a long-term prediction of estimated future financial results.
<h3>Data and Calculations:</h3>
Projected gross revenue = $5 million
The annual profit margin on cost = 25%
Annual profit in dollars = $962,500 ($3,850,000 x 25%)
Projected expenses for the year = $3,850,000
Actual cost of an employee = $187,500 ($5,000,000 - $3,850,000 - $962,500)
The expected maximum salary for the new employee = $93,750 ($187,500/2)
Thus, Rick cannot avoid offering a new employee more than <u>$93,750</u> if he must maintain a 25% annual profit margin on cost.
Learn more about budget projections at brainly.com/question/24940564
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