ABC IncIs Concerned About the Work Effort of Its Employees

question 55

Multiple Choice

ABC Inc.is concerned about the work effort of its employees.To minimize this problem,which of the following would be an effective policy for ABC to implement?

• A)Pay the employees a wage in excess of the wage the employees would earn elsewhere.
• B)Secretly install videocameras to monitor employees, and fire employees who shirk their responsibilities.
• C)Eliminate profit-sharing programs since these tend to give employees the incentive to shirk their duties until the year-end bonus is paid.
• D)Both a and b are correct.

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Definitions:

Break-Even Time

The period required for financial returns to cover the initial investment or costs, reaching a point where no profit or loss is incurred.

Payback Method

The payback method is a capital budgeting technique that calculates the time required to recoup the cost of an investment, focusing on cash flow and ignoring the time value of money.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in alignment with the company's goal of wealth maximization.

Financial Institution

An establishment that conducts financial transactions such as investments, loans, and deposits.