Paying Executives Based on Relative Stock Performance in Industry Rewards

question 11

Multiple Choice

Paying executives based on relative stock performance in industry rewards results due to external factors ______ paying executives based on absolute performance in industry.

• A) more than
• B) less than
• C) by the same amount as
• D) sometimes more than and sometimes less than

---

Definitions:

Fixed Costs

Expenses that do not change in total despite fluctuations in production or sales levels, such as rent, salaries, and insurance premiums.

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain, and where the business is essentially covering all its costs.

Contribution Margin Ratio

A measure of a company's ability to cover variable costs with sales, calculated as (Sales - Variable Costs)/Sales.

Fixed Costs

Expenditures on items like rent, salaries, and insurance that stay fixed, irrespective of production or sales figures.