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Peterborough Medical Devices makes devices and equipment that it sells to hospitals. The organization has a profit - sharing plan that is worded as follows:
Peterborough Medical Devices makes devices and equipment that it sells to hospitals. The organization
has a profitsharing plan that is worded as follows:
The company will make available a profitsharing pool that will be the lower of the following two items:
of income before taxes in excess of the target profit level, which is of net assets
OR
$ million.
The individual employee is paid a share of the profitsharing pool equal to the ratio of that employee's
salary to the total salary paid to all employees.
a If the company earned $ million of earnings before taxes and had net assets of
$ million, what would be the amount available for distribution from the profitsharing pool?
Enter answer as a whole dollar amount.
$Answer
b Suppose that Marg Watson's salary was $ and that total salaries paid in the company
were $ million. What would Marg's profit share be
Round ratio of Marg's salary to all salaries to decimal places. Round answer to whole dollar
amount.
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