Individual Prablems $1-1$

The owners of a small martufacturing coriourn have hired a vioe president to run the comparty mith the expectation that she will buy the comparty afler

five years. For the frat $$150,000$ of profit, the vice prisident's compensation is a flat annual salary of $$50,000$ plus $50$ so of company profits. Beyond

the first $$150,000$ in profits, the vice president's componsation is the salary she receives at $$150,000$ profit plus $10\%0$ of complany profits in exoess of

$$150,000.$

ar $$0\mathrm{.}550\mathrm{.}000\mathrm{.}5200\mathrm{.}000\mathrm{.}5150\mathrm{.}000\mathrm{.}5200\mathrm{.}000\mathrm{.}5250\mathrm{.}000.$ and $$300\mathrm{.}000$

The vice prisident has the option to purchase the comparry after five years. The purchase price for the comparty is set at $4$ times warningse $($profit$).$

compulad as average antual profitability ofeer the next free years. In free years, the company is expocted to bee worth $$5$ milliont.

annuad avafeabrier iorvils of $$0\mathrm{.}5250\mathrm{.}000\mathrm{.}5500\mathrm{.}000\mathrm{.}5750\mathrm{.}000.$ mid $51\mathrm{.}000\mathrm{.}000.$