Appendix: an Incentive-Compatible Revelation Mechanism Is

question 6

Multiple Choice

Appendix: An incentive-compatible revelation mechanism is

• A) self-enforcing
• B) always multi-period
• C) too complicated to influence decisions
• D) prevalent in vertically integrated businesses
• E) not adopted by franchise businesses

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Definitions:

Net Profit Margin Percentage

A financial metric that shows the percentage of profit a company makes for every dollar of sales, calculated by dividing net profit by total revenue.

Average Sale Period

A financial metric measuring the average time it takes for a company's inventory to turn into sales, often seen as part of inventory turnover analysis.

Price-earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings.

Dividend Payout Ratio

A financial metric that measures the percentage of a company's earnings paid out to shareholders as dividends, indicating how much money a company returns to shareholders versus how much it keeps to reinvest.