Gilda's Art Gallery Rewards Its Employees with Stock Each Year

question 166

Multiple Choice

Gilda's Art Gallery rewards its employees with stock each year the gallery makes profits. This stock allows the employees to own part of the gallery. This practice is known as

• A) the principle-agent problem.
• B) incentive pay.
• C) minimizing implicit costs.
• D) minimizing explicit costs.

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Definitions:

Collection Delay

The period between when a bill is issued or an invoice is sent and when the payment is actually received.

Average Amount

This term refers to the mean value or central tendency of a set of numerical values, calculated as the sum of the values divided by the number of values.

Lockbox Services

Banking services that process incoming checks by collecting and depositing them directly into the recipient's bank account, speeding up the collection process.

Collection Time

The average period it takes for a business to receive payments owed by its customers, reflecting on the efficiency of its credit policies and cash management.