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What Are Some of the Negative Effects of Increasing the Sensitivity

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What are some of the negative effects of increasing the sensitivity of managerial pay to firm performance?


Definitions:

Purchase Discounts

Reductions in the purchase price of goods, usually provided by a supplier to the buyer for early payment or bulk buying.

Net Price Method

A pricing strategy that considers the net cost of a product after deducting any discounts or allowances.

Gross Price Method

A pricing approach where the price of goods or services is determined without deducting any trade discounts or allowances.

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