Peter Was Recently Hired as a Salesman for a National

question 370

Multiple Choice

Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. Which of the following is a strategy the consulting firm may employ to discourage Peter from shirking his responsibilities?

• A)Tell Peter that the shareholders want to earn a large profit this year.
• B)Stop paying Peter bonuses based on how much he's sold.
• C)Allow Peter to set his own schedule and work from home frequently.
• D)Pay Peter an above-equilibrium wage.

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Definitions:

Opportunity Cost

The expense incurred by not choosing the second-best option while deciding.

Monthly Cash Flows

The total amount of money being transferred into and out of a business, particularly during a month.

Lockbox System

A system used by companies to expedite the collection of check payments by having them processed through a bank's PO Box.

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at their face value to create a return to the investors.