Question

1. (3.10.26): The boss says "hard times. In order to avoid layoffs, everyone takes a 10% pay cut." The next day he says "Things aren't as bad as I thought. Everyone gets a 10% pay raise, so we're all even." a. Is the boss right? Choose a salary, and give yourself a 10% pay cut.​

Answer 1

Answer: As we can see, the final salary after the 10% pay cut and 10% pay raise is $99,000, which is not equal to the original salary of $100,000. Therefore, the boss's statement that "we're all even" is not correct.

Explanation:

Let's choose a salary of $100,000 for this example.

If everyone takes a 10% pay cut, then the new salary would be:

$100,000 - 10% of $100,000 = $100,000 - $10,000 = $90,000.

Now, if everyone gets a 10% pay raise on the reduced salary of $90,000, the new salary would be:

$90,000 + 10% of $90,000 = $90,000 + $9,000 = $99,000.