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Bezzdna [24]
2 years ago
8

Managerial compensation is often tied to financial performance. one way to make this tie explicit is to offer payment in terms o

f?
Business
1 answer:
Harman [31]2 years ago
7 0

Managerial compensation is often tied to financial performance. one way to make this tie explicit is to offer payment in terms of stock options.

<h3>What is meant by stock options?</h3>

This is the term that is used to refer to the right that the owner of a stock would have top sell the stock at a agreed upon date. This is a right but it is not an obligation.

The price at which the stock would be sold has top be agreed upon. Hence we can say that Managerial compensation is often tied to financial performance. one way to make this tie explicit is to offer payment in terms of stock options.

Read more on stocks here: brainly.com/question/25818989

#SPJ1

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Answer:

Nissan's all-electric car, the Leaf

PV cost of Leaf Purchase =   $16,529

PV cost of Leasing =             $12,944.78

The company should lease the car.

Explanation:

a) Costs incurred to purchase the Leaf:

Base price                    $32,780

less Federal tax credit ($7,500)

Charging station             2,200

less 50% tax credit         (1,100)

Cash paid                  $26,380

Sales value after 3 yrs (9,851) ( $26,380 - 40% of base discounted to PV)

Net PV Investment    $16,529

b) Calculation of Discounted Present Values of Payments under Leasing, using online financial calculator:

PV (Present Value) $12,944.78

N (Number of Periods) 3.000

I/Y (Interest Rate) 10.000%

PMT (Periodic Payment)   $4,200.00

Starting Investment $2,500.00

Total Principal $15,100.00

Total Interest $2,129.50

c) The purchase of the Leaf would involve a present value cost of $26,380 after deducting all the savings from tax.  The 40% sales value of the car at the end of 3 years = $13,112 ($32,780 x 40%).  When this sales value is discounted to PV of $9,851, the PV of the car investments becomes $16,529 ($26,380 - $9,851).  On the other hand, leasing will cost in PV the sum of $12,944.78

.

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Answer:

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Explanation:

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