20 June 2011
Let C be the cost excluding manager's commission and MC be the manager's commission.
Then, Profit Before Tax will be 0.2(C+MC) Profit After Tax will be 0.14(C+MC).That is 70% of PBT(Since Tax rate is 30%).
Manager's Commission will be 0.007(C+MC).That is 5% of NPAT
MC=0.007(C+MC) MC-.007MC=.007C 0.993MC=0.007C MC=0.007C/0.993. If you have any one parameter,cost or profit, Manager's commission can be found out by using the above relations.