To Reduce the Excessive Focus of Subunit Managers on Their

question 68

Multiple Choice

To reduce the excessive focus of subunit managers on their own subunits, many companies compensate subunit managers on the basis of ________.

• A) both the operating income earned by their respective subunits and the company as a whole
• B) both the investing income earned by their respective subunits and the company as a whole
• C) only the investing income earned by their respective subunits
• D) both the net income and earned by their respective subunits and the company as a whole

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Definitions:

Language Of Finance

The specific jargon, terms, and concepts used in the finance industry to communicate financial information and decisions.

Proprietor Form

A business structure owned by a single individual, where the owner and the business are legally the same entity.

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels of government, often seen in the taxation of corporate profits and then again when dividends are paid to shareholders.

Limited Liability

An advantage of the corporate form. Stockholder liability for the actions of a company is limited to the value of the stock. That is, a suit against the corporation cannot be made against a stockholder simply because the stockholder is an owner.