Quentin Wants to Reward His Employees While Also Raising Equity

question 12

Multiple Choice

Quentin wants to reward his employees while also raising equity in his small business. By doing this, he will be able to keep control of the business until the time comes to hand over the reins to his eligible employees. Quentin has decided to start ______.

• A) merit pay system
• B) profit sharing
• C) gainsharing
• D) an employee stock ownership plan

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Definitions:

Investing

Allocating fiscal resources with the foresight of making an income or profit.

Gross Investment

The total amount spent on new capital assets before accounting for depreciation.

Depreciation

The reduction in the value of an asset over time, often due to wear and tear or the passage of time.

Inventory Investment

The stock of goods or raw materials kept by a business to meet future sales or production needs.