Which of the Following Is True Regarding Long-Term Variable Pay

question 2

Multiple Choice

Which of the following is true regarding long-term variable pay?

• A) Stock options qualify for special tax treatment for employees.
• B) Small public organizations are more likely to provide stock options than large public organizations.
• C) Stock options guarantee a fixed rate of return on investment.
• D) None of the above

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Definitions:

Fixed Cost

Expenses that do not vary with the level of output or sales, such as rent, salaries, or insurance premiums.

Variable Cost

Expenses that vary in proportion to the volume of goods or services produced in a business.

Opportunity Cost

The forfeiture of potential benefits from other options by selecting a specific one.

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.