Adding Stock Options and Bonuses for Performance to the Compensation

question 93

Multiple Choice

Adding stock options and bonuses for performance to the compensation of a manager is intended to closer align the interest of the manager with

• A) stockholders.
• B) lenders.
• C) employees.
• D) none of the above.

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Definitions:

Operating Activities

Activities that constitute the primary or central operations of a business, including production, sales, and delivery of the company's products or services.

Indirect Method

A cash flow statement formulation approach where net income is adjusted for non-cash transactions and changes in working capital to arrive at operating cash flow.

Accounts Receivable

Accounts Receivable refers to the money owed to a business by its clients or customers for goods or services delivered but not yet paid for, representing a current asset on the balance sheet.

Net Cash

The amount of cash available after accounting for cash inflows and outflows, representing a company's liquidity position.