Question

In the United States, if a middleman is terminated, the company is required to pay 1 percent of the middleman's average annual compensation multiplied by the number of years the middleman served as a final settlement. What is the amount the company is required to pay if the middleman's average annual compensation is $100,000 and the middleman served for 5 years?

1) 1,000
2) 5,000
3) 10,000
4) 50,000

Answer 1

To determine the final settlement for a terminated middleman, we multiply 1% of the average annual compensation by the number of years served. In this case, the final settlement is $5,000.

Step-by-step explanation:

To calculate the final settlement the company must pay to the terminated middleman, we need to use the formula provided in the question. The formula is 1 percent of the middleman's average annual compensation multiplied by the number of years the middleman served. So, we take the middleman's average annual compensation of $100,000, calculate 1 percent of that which is $1,000, and then multiply that by the number of years served, which is5.

The calculation will be as follows:Final Settlement = 1% of $100,000 * 5 years= $1,000 * 5= $5,000To calculate the amount the company is required to pay when a middleman is terminated, we need to multiply 1 percent of the middleman's average annual compensation by the number of years the middleman served. In this case, the middleman's average annual compensation is $100,000 and the middleman served for 5 years.