5. Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders’ investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.
The conclusion above depends on the assumption that
(A) the firm will have relatively low profits in recession years
(B) the amount represented by a ten percent return on stockholders’ investments in the company will increase from year to year
(C) profits rarely exceed a ten percent return on stockholders’ investments in the company
(D) profits in excess of a ten percent return on stockholders’ investments in the company are all distributed in the form of bonuses（A）
(E) bonuses at DSR never drop to zero
不明白，也搜不到相关讨论，拜托帮忙解释一下
嗬嗬，我来试着回答一下：先简化一下文意
Bonus = (Profit- 10% investment)X a
假设a为 percentage for bonus on the product of profit & 10% investment.
Low recession bonus < peak profit year bonus
带入上述公式，一般stakeholder investment是初期一个值，可假定不变。
便推出： low recession profit < peak profit year profit
=> recession year has lower profit.
Evidence:Higher profits mean higher bonuses
Conclusion: Low bonuses in general economic recession (high bonuses in peak profit year)
The assumption is the gap, that is to say, the relationship between profits and in recession year (or in peak profit year)
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