A CFO Whose Compensation Plan May Have Had the Effect

question 80

Multiple Choice

A CFO whose compensation plan may have had the effect of creating an incentive for unethical actions includes:

• A)Kenneth Lay
• B)Scott Sullivan
• C)Bernie Madoff
• D)Dennis Kozlowski

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Definitions:

Opportunity Cost

The potential benefit that is given up when choosing one alternative over another.

Comparative Advantage

The ability of a party to produce a particular good or service at a lower marginal cost than others.

Steel

An alloy of iron and carbon, and sometimes other elements, used as a primary material in buildings, infrastructure, tools, ships, automobiles, machines, appliances, and weapons.

Automobiles

Motor vehicles designed and manufactured to transport individuals or small groups of people.