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24 March, 06:33

A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500. What should the company do

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  1. 24 March, 06:57
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    The question is incomplete. Here is the complete question

    A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500. What should the company do

    a. Fire the employees and save $1500 on rent

    b. Not fire the employees keeping them generates a profit of $1100 per employee

    c. Not fire the employees since keeping them generates a profit of $1085 per employee

    d. None of the above

    Answer:

    Not fire the employees since keeping them generates a profit of $1085

    Explanation:

    The amount of money contributed by each employee in the company is $4,100

    The amount of expenses made is $3,000

    Fixed costs can be calculated by dividing the amount of money used in purchasing the office space by the total number of employees

    = 1500/100

    = $15

    Therefore, the earnings made from each employee is

    = $4,100-$3,000-$15

    = $1085

    Hence since the company is making a profit of $1085 per employee then there is no need to fire them.
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