Which of the Following Statements About Salesperson Compensation Is FALSE

question 245

Multiple Choice

Which of the following statements about salesperson compensation is FALSE?

• A) Commissions reduce the need for working capital.
• B) Incentives must be carefully aligned with the firm's objectives.
• C) Compensation plans should be clear.
• D) Sales managers must plan, implement, and control.
• E) None of the above is false.

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Definitions:

Discount Method

Method of computing the net price using the trade discount rate to calculate the amount of trade discount, and, subsequently, the net price.

Actual Interest Rate

The real cost of borrowing money, including all fees and interest rates, more comprehensively represented than the nominal interest rate.

Discount Rate

The percent used for calculating a trade or cash discount. The interest percent charged by the buyer of a discounted note.

Actual Interest Rate

A rephrased term for the effective interest rate that takes into account the compounding period, fees, or other loan terms, providing a true cost of borrowing.