Question
Abc Berhad employs Ms Jane as a deputy general manager. Recently, due to the Covid-19 pandemic, it has been forced to downsize its workforce one
Abc Berhad employs Ms Jane as a deputy general manager. Recently, due to the Covid-19 pandemic, it has been forced to downsize its workforce one of the employees the managing direction are contemplating to let go is Ms Jane. However, the company needs to compensate Ms Jane if she is terminated. The company needs to consider the following in the severancee package:
1) A portion of her monthly salary. Her current salary per annum is $60,000 a year. Her entitled compensation is 50% of her current salary before factory yearly salary increments. Her compensation will be for the years that she would have worked to the point of retirement. She is currently 30 year old. The companys retirement age is 55 years old.
2) The rate at which the average salary increments is 47% per annum for most employee.
3) Ms Jane having worked for 15 years is entitled to receive a lump sum payment upon retirement of $100,000. This also need to be factored in the severance package.
4) The company use discount rate of 7% per annum for PV calculation.
Calculate PV of the compensation that the company need to pay to Ms Jane if he is terminated.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started