One Disadvantage of Commission Plans Is That When They Are

question 142

True/False

One disadvantage of commission plans is that when they are based on sales volume, salespeople may be encouraged to discount unnecessarily, resulting in lower profitability.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the firm's earnings.

Variance

A measure of the spread between numbers in a data set, showing how much the numbers differ from the average.

Black-Scholes OPM

A mathematical model used for pricing European-style options, incorporating factors such as stock price volatility and time to expiration.