Which of the Following Is an Advantage of a Lump-Sum

question 5

Multiple Choice

Which of the following is an advantage of a lump-sum increase (LSI) plan compared with traditional raises?

• A) LSI plans eliminate the need for annual adjustments of the pay matrix.
• B) Employees are more satisfied with LSIs.
• C) It heightens employees' awareness of what reward their performance merited.
• D) It increases the compounding effect of succeeding raises on the employee's base pay.

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Definitions:

Preferred Equity

A type of equity which is ranked higher than common stock and usually has fixed dividend payments.

Common Equity

Common equity represents the ownership interest in a company held by common shareholders, as reflected in the company's equity capital.

Lowest Terms

The simplest form of a fraction, where the numerator and denominator are reduced to their smallest values through common factor division.

Ratio

A ratio indicating how often one number can encompass or be encompassed by another value.