'Relative Performance Contracts with Hindsight' Are a Good Idea Because

question 54

Multiple Choice

'Relative performance contracts with hindsight' are a good idea because

• A)They focus on historical standards such as last year's results
• B)They make managers look good because "with hindsight' means that managers can adjust their targets after having seen actual outcomes
• C)They encourage a philosophy of doing what is best for the firm in the light of current circumstances
• D)They encourage competitiveness between individuals in an organization

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Definitions:

S Corporation

A special designation for a corporation that allows income, losses, deductions, and credits to be passed through to shareholders for tax purposes.

Dual Purpose Corporation

A business entity designed to operate for both profit and to achieve a social or charitable goal.

General Partnership

A partnership in which the partners divide profits and management responsibility and share unlimited personal liability for the partnership’s debts.

Business Losses

Business losses are the negative financial impacts a business suffers, often reflected in its financial statements as expenses exceeding revenues.