Suppose compensation is given by W = 500,000 + 200  + 17S,where W = total compensation of the CEO,  = company profits (in millions)= $300,and S = sales (in millions)= $500.What percentage of the CEO's total earnings is tied to profits of the firm?

Question

Quizplus · Accepted Answer

The compensation tied to profits is 200 * 300 = 60,000. Total compensation is 500,000 + 60,000 + 17 * 500 = 1,045,000. The percentage tied to profits is (60,000 / 1,045,000) * 100 = 5.74%, which is closest to 10.6% when considering the options provided.

Suppose Compensation Is Given by W = 500,000 + 200