For the Situations Described Below, Explain Whether Managers Would Be

question 28

Essay

For the situations described below, explain whether managers would be motivated to manage earnings, assets, and equity upward and liabilities downward, or alternatively, managers may be motivated to manage earnings, assets, and equity downward and liabilities upward.
$$\begin{array} { | l | l | } \hline \text { Situation } & \begin{array} { l } \text { Management motivation } \\\text { Upward / Downward) }\end{array} \\\hline \text { To obtain higher bonuses. } & \\\hline \text { To increase the likelihood of receiving } \\\text { government subsidies and trade protection. } & \\\hline \begin{array} { l } \text { To improve bargaining position relative to } \\\text { employee unions. }\end{array} & \\\hline \text { To meet covenants based on net income. } & \\\hline \text { To meet regulatory requirements. } & \\\hline\end{array}$$

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Definitions:

Mediodorsal Thalamus

A central nervous system structure involved in the storage of experiences.

Medial Temporal Lobe

A critical brain area for the consolidation of long-term memories, located near the middle of the temporal lobe.

Long-Term Memory Storage

The process of retaining information over extended periods, ranging from days to a lifetime.

Frontal Lobes

The part of the brain located at the front of each cerebral hemisphere, responsible for voluntary movement, expressive language, and managing higher level executive functions.