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Business Modeling Lab Room Activities Lab03 - Model Design Activity 1 - Management Fee

The document describes three activities for a business modeling lab: 1. Calculating management fees based on monthly net profit thresholds. 2. Calculating personal income tax in Vietnam using tax thresholds, base taxes, and marginal tax rates. 3. Designing a promotion program to award shopping vouchers to customers based on their total purchase value, with different voucher amounts for different purchase thresholds.

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Viem Anh
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38 views4 pages

Business Modeling Lab Room Activities Lab03 - Model Design Activity 1 - Management Fee

The document describes three activities for a business modeling lab: 1. Calculating management fees based on monthly net profit thresholds. 2. Calculating personal income tax in Vietnam using tax thresholds, base taxes, and marginal tax rates. 3. Designing a promotion program to award shopping vouchers to customers based on their total purchase value, with different voucher amounts for different purchase thresholds.

Uploaded by

Viem Anh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BUSINESS MODELING LAB ROOM ACTIVITIES

LAB03 – MODEL DESIGN

ACTIVITY 1 – MANAGEMENT FEE

Management of a company is paid proportionally to the company's monthly net profit before tax
(NP) and management fee. Particularly:

 If NP is positive and below $5,000, management is paid 2% of that NP.


 If NP is equal or higher than $5,000 but below $10,000, management is paid 4% of that NP.
 If NP is equal or higher than $10,000 but below $20,000, management is paid 6% of that NP.
 If NP is equal or higher than $20,000 but below $50,000, management is paid 8% of that NP.
 If NP is equal or higher than $50,000, management is paid 6% of that NP.
 If the company does not make profit (make a loss), management is paid nothing.

Data of monthly NP before tax (in thousands) is available last financial year as follows:

Month Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
NP 48 10 19 -47 -37 181 -9 -28 29 29 -37 4

An account of the company has created an Excel model to calculate management fee expenses for
the company during the last 12 months.

1. Create an excel workbook named “LAB03 MODEL DESIGN 21092020”


2. Change “sheet 1” into “Management fee”, color the name tab in pink
3. Enter the following information into the model

4. Design Data Table 1: Data Table 1 is supposed to contain information about different type of
management fee schedules.
5. Design Report Section to find monthly management fee expenses.

Excel features & modeling to be learnt

- Hlookup
- Design data section and report section
ACTIVITY 2 – PERSONAL INCOME TAX

Ha Linh is working for an accounting department of Halo Company. She is asked by the chief
accountant to calculate salary for all employees in the company for August 2017. Chief accountant
also wants her to print a salary slip for each employee. Currently, there are ten employees in her
company.

Ha Linh has collected several documents about salary policy and personal income tax law of Vietnam
and she’s summarized in following tables.

Table 1: Key salary calculation method

Net monthly salary = Gross salary – Deductions – Personal Income Tax

Table 2: PIT rates

Monthly taxable income (Million VND) Tax rate


0–5 5%
>5 – 10 10%
>10 - 18 15%
>18 - 32 20%
>32 - 52 25%
>52 – 80 30%
More than 80 35%
Vietnam personal income tax rates are progressive to 35%. Nonresidents are
taxed at a flat tax rate of 20%. Nonemployment income is taxed at rates from
0.1% to 25%.
Ha Linh decides to break her model into four different modules: (1) Search module, (2) Tax
calculation module, (3) Base salary module, and (4) Deduction module. In this exercise, you are
asked to build Tax calculation module.

Basically, the logic behind the primary tax calculation involves determining relevant threshold, base
tax and marginal rate corresponding to the nominated taxable income. In order to understand the
logic behind this calculation, the following definitions may be useful:

Relevant threshold the income level at which the marginal rates changes
Base tax the dollar amount of tax payable at that relevant threshold.
Marginal rate the number of VND in tax that will be paid on each VND100 that the
nominated taxable income exceeds that relevant threshold.

Thus, to calculate personal income tax for an individual, the following structure may be helpful:

PIT = Base tax + (Taxable income – Relevant threshold) * Marginal rate

Example: PIT for an employee who has taxable income of VND 16,000,000 is calculated as follows:

Taxable Income Categories Detailed calculation Results


(VND) (VND)
Loss Nil 0

1 – 5,000,000(a) Nil plus VND 5 for each VND 100 250,000(b)


(Marginal tax at this level is 5%)
5,000,0001 – 10,000,000 VND 250,000 plus VND 10 for each VND 100 over VND 750,000(b)
5,000,000 (marginal tax at this level is 10%)
10,000,001 – 16,000,000 VND 750,000 plus VND 15 for each VND 100 over VND 1,650,000(c)
10,000,000
(Marginal tax at this level is 15%)
In the above detailed explanation (a) presents tax threshold, (b) shows tax base for each tax threshold,
and (c) illustrates personal income tax:
PIT = Base Tax + (Taxable Income – Highest threshold)*Marginal rate

= VND 750,000 + (VND 16,000,000 – VND 10,000,000)*15%

= VND 1,650,000

Requirement

1. Open file “Personal Income Tax Lab3”, copy the spreadsheet to file “LAB03 MODEL DESIGN
21092020” of yours.
2. Calculate Base Tax in the CALCULATION SECTION.
3. Calculate PIT in the REPORT SECTION following the rule:
PIT = Base tax + (Taxable income – Relevant threshold) * Marginal rate
You will need to use VLOOKUP function. Example: to find name of employee coded 1356, we
use the formula F17=VLOOKUP(E17,$A$17:$C$26,2,0)

Your final answer should look like these two tables.


Excel features & modeling to be learnt:

- Vlookup
- Complex structure
- Break big problem in to smaller parts
ACTIVITY 3 – PROMOTION PROGRAM

In this year end, MD’s retailer decides to award shopping voucher to its loyal customer whose total
purchase value during 2016 is not less than VND 5mil.

The promotion program specifies that the values of the vouchers depend on the total purchase
value as follows:

 Total purchase value of VND 20mil or more, customer will get a voucher of VND 500,000.
 Total purchase value of VND 15mil to less than VND 20mil, customer will get a voucher of
VND 400,000.
 Total purchase value of VND 10mil to less than VND 15mil, customer will get a voucher of
VND 300,000.
 Total purchase value of VND 7mil to less than VND 10mil, customer will get a voucher of
VND 200,000.
 Total purchase value of VND 5mil to less than VND 7mil, customer will get a voucher of VND
100,000

As a public relation officer, you are required to send the voucher to all loyal customers to their
address.

1. Exploring the mess


2. Search for information
3. Identify a problem
4. Search for solutions
5. Evaluate solutions
6. Implement solutions

Please note that you might make up any data!

Excel features to be learnt & Modeling:

This activity combines both modeling principles and model designing topic.

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