Which Statement Is FALSE About Performance Metrics

question 109

Multiple Choice

Which statement is FALSE about performance metrics?

• A)The cost benefit criterion leads companies to rely on imperfect performance metrics.
• B)The more a manager's reward depends on a performance metric,the more incentives the manager has to take actions to maximize that measure.
• C)Top management should define the performance metric to promote goal congruence and base enough reward on it to achieve managerial effort.
• D)The more uncontrollable factors affect a manager's reward,the less risk the manager bears.

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Definitions:

Income Tax Expense

The cost incurred by a company due to the taxes on its taxable income.

After-Tax Discount Rate

The discount rate used in analyzing cash flows that accounts for taxes, representing the net cost or benefit of an investment after taxes.

Income Tax Rate

How much of a person's or company's income is taken as tax.

Straight-Line Depreciation

A strategy for dividing the cost of a tangible asset over its service life in identical annual sums.