With This Compensation Plan, It Is Difficult to Build Loyalty

question 113

Multiple Choice

With this compensation plan, it is difficult to build loyalty of the salesforce to the company.

• A) straight salary.
• B) salary plus a bonus.
• C) a combination pay plan.
• D) straight salary plus expenses.
• E) straight commission.

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Definitions:

Sales Revenues

The total amount of money generated from the sale of goods or services by a company before any costs or expenses are subtracted.

Cash Operating Expenses

Expenses that a company pays in cash during an accounting period, excluding non-cash expenses such as depreciation.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Discount Rate

The rate of interest utilized in the process of discounted cash flow analysis for assessing the present worth of future cash flows.