When Considering Incentive Plans, You Should Keep in Mind That

question 59

Multiple Choice

When considering incentive plans, you should keep in mind that:

• A) All plans should be the same
• B) Big companies do not need incentive plans while small companies need them
• C) Shorter intervals between performance and receipt of rewards motivates salespeople
• D) Team incentive plans should always be based on team performance
• E) Bonuses should always be paid annually

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Definitions:

Depreciable Assets

Assets whose cost is allocated over their useful lives through depreciation, typically tangible assets like machinery, buildings, and equipment.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Amortization Expense

The method of incrementally expensing the original value of an intangible asset throughout its period of utility.

Straight-Line Amortization

A method of gradually writing off the nominal value of an intangible asset over its useful life in equal installments.