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Discuss How Firms Can Evaluate Manager Performance in Such a Way

question 40

Essay

Discuss how firms can evaluate manager performance in such a way as to discourage myopic behaviour.


Definitions:

Straight-Line Method

A method of depreciation that allocates an equal amount of the asset's cost to each accounting period over its useful life.

Depreciation Expense

Apportioning the cost of a concrete asset over its duration of use.

Units-Of-Activity

A depreciation method that allocates expense based on the actual usage or activity level of an asset.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, such as straight-line or declining balance methods.

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