Which of the Following Ensures That Managers Are Rewarded Only

question 13

Multiple Choice

Which of the following ensures that managers are rewarded only when a company performs better than its competitors?

• A) A constant strike price for executive stock options
• B) A strike price that increases with time
• C) A strike price that changes in line with an index of stock prices
• D) A strike price that is tied to reported profit

Understand the concept and calculation of the profitability index for investment decisions.

Calculate and interpret the after-tax accounting rate of return on investments.

Evaluate investment options based on net present value and profitability index.

Analyze the tax effects of depreciation and investment allowances on investment decisions.

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Definitions:

Gage

A device used for measurement or to determine conformity to a set of specifications, often used in manufacturing and engineering to ensure quality and precision.

Extra Material

Additional material provided beyond the specified dimensions to allow for finishing or machining.

Flat Sheet

A type of raw material that comes in flat panels, typically used in manufacturing or construction; it can be cut and shaped into various parts and forms.

Without Cutting

A manufacturing or shaping process that does not involve removing material, such as bending, casting, or forming.