Tran Is Interested in Incorporating Research-Based Recommendations on How to Use

question 70

Multiple Choice

Tran is interested in incorporating research-based recommendations on how to use monetary rewards effectively. Which of the following is an implementation guideline for the principle of "make rewards contingent on performance"?

• A) ensure pay levels vary significantly based on performance levels
• B) distribute fake currencies or reward points that can later be traded for cash, goods, or services
• C) only promise rewards that are available
• D) specify what employees are expected to do, as well as what they should refrain from doing

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Definitions:

Present Value

The today's worth of a future sum or cash flows series, based on a predetermined rate of return.

Cash Inflows

Refers to the money coming into a company, typically from operations, investments, and financing activities.

NPV Zero

A situation where the net present value of a project or investment is zero, indicating that the projected earnings are exactly equal to the initial investment.

Required Return

The minimum expected return an investor demands for investing in a non-risk-free asset.