Answer :
Option 4 - salaries of $90,000 to Lance and $45,000 to Neil and Ed with the remainder split equally would be the most equitable plan.
Option 4, which involves providing salaries to Lance, Neil, and Ed with the remainder split equally, would be the most equitable plan for their partnership. By allocating salaries based on their respective contributions, Lance would receive a salary of $90,000, while Neil and Ed would receive $45,000 each. This allocation recognizes Lance's full-time commitment and compensates him accordingly, while also acknowledging the part-time involvement of Neil and Ed.
This plan ensures fairness by directly linking compensation to individual efforts and investments. Lance, who has contributed $100,000, receives a higher salary than Neil and Ed due to his larger investment. At the same time, Neil and Ed, with contributions of $200,000 and $150,000 respectively, are appropriately compensated for their involvement.
Splitting the remainder equally among the partners further promotes equity by considering their shared responsibilities and interests. This approach acknowledges the equal partnership between the three individuals, regardless of their varying contributions and workloads.
In summary, option 4 strikes a balance between recognizing individual investments and efforts while maintaining equity among the partners by providing salaries proportional to their contributions and splitting the remaining profits equally.
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