His new employer has offered Malcom Davis a choice of profit-sharing plans. For Plan A, he can receive 1/90 of the company’s gross income. For Plan B, he can receive 1/60 of the company’s profit. Gross income is the total amount the company takes in. Profit is the difference of the gross income and expenses. The company’s expenses for one month are $100,000.
A) Write an equation for finding the gross income that would give Malcom Davis the same amount of money with either plan.
B) Solve the equation from Exercise A and interpret the solution.
C) How much would Malcom Davis receive when the two plans are the same?
D) If the gross income of the company is less than the amount from Part B, which plan would be better for Malcom Davis? Show work to support your answer.