Student is working for small company named Adtom, LLC. There are five primary employees. Owners wish to establish a retirement account for the company. Their objective is that each employee has the possibility of accumulating $1,000,000 for retirement. Adtom is willing to contribute up to 3% of the employee's salary to help achieve this goal. Your assignment is to provide answers to the following questions and make an overall recommendation to management whether to proceed or not. Management needs you to address the factors that could impact the result as well. Questions to be answered in your "email" write-up: 1. Based on the table of employee data and assuming a rate of return of 7.55% per year, if Adtom contributes 3% of each person's salary until they retire, how much would be in the employee's 401K (assuming only the employer's portion)? Does that meet the $500,000 goal? 2. What dollar amount would A.P. Industries have to contribute to the 401k plan for each year to reach total account value of $500,000 for each employee? 3. What percentage of each employee's salary is required to meet the objective? 4. How would the required contribution change if the rate of return increased to 10.25% per year? 5. How would the required contribution change if the rate of return decreased to 3.75% per year? Create "email" to management with the results of your calculations. Describe how your results reflect the Great Underlying Rule of Finance #1: Higher the risk, higher the required rate of 6. return. Employee 1 2 3 4 5 Salary $225,000 $155,000 $97,000 $54,000 $44,000 Years to Retirement 15 20 30 35 40