In: Finance
Cleaner's Inc. is switching to paying employees every 2 weeks rather than weekly and will therefore"skip" 1 week's pay. The firm has 25 employees who work a 60-hour week and earn an average wage of $12.50 per hour. Using a 10% rate of interest, how much will this change save the firm annually?
Saving from the change = Present value of 1-week payment - Present value of 2-week payments
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.