Where Management's Bonuses Are Tied to Profit-Based Performance Measures Management

question 25

Multiple Choice

Where management's bonuses are tied to profit-based performance measures management may have an incentive not to revalue assets because:

• A) When revaluing assets, the value of the asset base increases, consequently the return on assets will fall.
• B) A revaluation may result in a decrease in the value of the asset base.
• C) A revaluation that increases the value of the asset base will increase profit measures.
• D) When revaluing assets, the value of the asset base increases, consequently the debt to equity ratio will fall.
• E) None of the given answers.

---

Definitions:

Informed Consent

The voluntary agreement to participate in research or undergo a medical procedure after understanding the risks, benefits, and alternatives.

Research Study

A structured process of investigating a hypothesis or answering a specific question, using systematic collection, analysis, and interpretation of data.

Lay Language

Simplified language that is easily understood by individuals without specialized knowledge.

Randomized Controlled Trial (RCT)

A study design that randomly assigns participants into an experimental group or a control group to measure the effectiveness of interventions.