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Cable and Jones are considering forming a partnership whereby profits will be allocated through the use of sa laries and bonuses. Bonuses will be 10%
Cable and Jones are considering forming a partnership whereby profits will be allocated through the use of sa laries and bonuses. Bonuses will be 10% of net income after salaries and bonuses. Cable will receive a salary of $30,000 and a 10% bonus. Jones has the option of receiving a salary of $40,000 and a 10% bonus or simply receiving a salary of $52,000. Required: Determine the level of income that would be necessary so that Jones would be indifferent to the profit- sharing option selected
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