1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
denis23 [38]
3 years ago
9

The owners of a small manufacturing concern have hired a manager to run the company with the expectation that (s)he will buy the

company after five years. The goal of the owners in making this hire is to find the appropriate manager that will increase profits substantially. Compensation of the new manager is a flat salary plus 50% of first $200,000 of profit, and then 5% of profit over $200,000. Purchase price for the company is set as 41 2 times net earnings (profit), computed as average annual profitability (prior to calculation of the managers bonus) over
the next five years.
(a) Does the bonus structure for the manager provide the manager with the appropriate incentive to increase profits beyond the first $200,000 ? Explain briefly.
(b) Is it a good idea to link the purhcase price of the company to the earnings (profit) of the company. Given this linkage, what do you think the manager will try to do?
(c) Does this contract align the incentives of the new manager with the (current)goals of the owners?
Business
1 answer:
Viefleur [7K]3 years ago
8 0

Answer:

sry need points

Explanation:

You might be interested in
In their relationship, neither bette nor sam wants to take control or make decisions. this type of relationship is known as a co
yKpoI14uk [10]
<span>Simply put ,this is a Submissive Symmetrical Relationship. This type of relationship happens when there are two partners but neither wants or is able to take complete control or make decisions. In this scenario, that is exactly what Sam and Bette are doing.</span>
5 0
3 years ago
Using word of mouth for finding a job is helpful because _____.
leonid [27]
So that you can talk to the person offering the job
7 0
3 years ago
You are holding a stock that has a beta of 1.39 and is currently in equilibrium. The required return on the stock is 20.47%, and
r-ruslan [8.4K]

Answer: 26.73%

Explanation:

You can calculate the expected return using the Capital Asset Pricing Model (CAPM).

Formula is:

Expected return = Risk free rate + beta * (Market return - risk free rate)

Use the previous figures to solve for the risk free rate:

20.47% = Rf + 1.39 * (16.50% - Rf)

20.47% = Rf + 22.935% - 1.39R

20.47% - 22.935% = Rf - 1.39Rf

-2.465% = -0.39Rf

Rf = -2.465% / -0.39

= 6.32%

New expected return is:

= 6.32% + 1.39 * (21% - 6.32%)

= 26.73%

7 0
3 years ago
Determine if the following situations describe a game or a decision. Indicate what specific features of the situation caused you
hammer [34]

Answer:

China chooses a level of tariffs to apply to American imports.

3 0
3 years ago
​small businesses are hesitant to involve in global business because it:
7nadin3 [17]
<span>Small businesses are hesitant to involve in global business because it involves various trade laws or tariffs. Taking that kind of plunge in the business world for a business of small scale is risky situation or at least the small business owners feel. Sometimes this would be the turning point for these businesses to break out huge.</span>
4 0
3 years ago
Other questions:
  • Moises has dreamed of setting up a graphic design company since he was in college. He always knew he wanted to work from home an
    14·1 answer
  • At the beginning of 2023, the Mackinac Company purchased a machine for $510,000 (salvage value of $60,000) that had a useful lif
    5·1 answer
  • Only very large businesses can become corporations.<br> A. true<br> B. false
    6·1 answer
  • Suppose Bev's Bags makes two kinds of handbags—large and small. Bev rents an industrial space where she keeps the fabric, the in
    12·1 answer
  • The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five comp
    5·1 answer
  • If a firm borrowed money on a six-month bank loan, the firm's working capital immediately after obtaining the loan, relative to
    6·1 answer
  • Grey, Inc., uses a predetermined rate to apply overhead. At the beginning of the year, Grey budgeted its overhead costs at $220,
    15·1 answer
  • Brian lives in Chicago and runs a business that sells pianos. In an average year, he receives $793,000 from selling pianos. Of t
    14·1 answer
  • Oriental Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment in depr
    12·1 answer
  • Which country has a comparative advantage in the production of baseballs? explain.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!