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Mashcka [7]
3 years ago
7

The manager of your company's pension fund is compensated based entirely on fund performance; he earned over $1.2 million last y

ear. As a result, the fund is contemplating a proposal to cap the compensation of fund managers at $100,000. Provide an argument against the proposal.
Business
1 answer:
Anon25 [30]3 years ago
8 0

Answer:

The compensation to the fund manager is based on the performance of the pension fund. If the fund performs well and earns significant profit, then the compensation to the mangers should increase.  

If it incurs losses, then the argument for capping the compensation of funds managers will gain ground. Note that the manager is being paid according to the pay-for-performance scheme. Thus it is unjustified that his compensation is reduced when there is no significant evidence that his performance was responsible for the poor performance of the fund. The manager has earned over $1.2 million last year. Hence fixing the compensation of managers to $100,000 should be considered only when the fund has under performed drastically. Without such evidence, such capping will only demoralize them and the profitability of the company will fall.

Explanation:

You might be interested in
A company investing borrowed funds expects to earn a return greater than the interest it will pay for the use of funds is using
Naddika [18.5K]

Answer:

Financial leverage

Explanation:

Financial leverage is defined as the use of borrowed funds to perform a business activity or investment that is expected to have higher returns than the cost of borrowing the money (interest).

When a company is looking for funds for its activities there are 3 options they can use: equity, debt, or lease.

Use of equity is the only option where no extra cost is incurred for use of funds.

When using debt or lease cost of use is incurred. The business will need to engage in an activity that will give it revenue above cost of debt.

This practice is called use of financial leverage.

3 0
3 years ago
If the Netherlands enjoys comparative advantage in the production of dairy products, it implies that the opportunity cost of pro
sladkih [1.3K]

Answer:

False

Explanation:

A country has comparative advantage in production if it produces at a lower opportunity cost when compared with its trading partners.

I hope my answer helps you

7 0
3 years ago
A trading arrangement that eliminates most or all barriers to trade among participating nations and utilizes common barriers to
Katen [24]

Answer:

preferential trade agreement

Explanation:

This agreement is known as a preferential trade agreement. It is called this because it tends to make it easier for specific goods to be traded but only to the countries that are part of the group and/or agreement. This agreement also makes it harder for countries that are not part of the agreement to be able to trade with the countries that are in order to maintain the countries within the agreement trading with each other.

4 0
3 years ago
The journal entry for the purchase of inventory on account using the perpetual inventory system is:.
Solnce55 [7]

The journal entry for the inventory purchased will be to record the sale and another one to record the cost of the sale.

<h3>What is a journal entry?</h3>

It should be noted that a journal entry is used to record the financial activities of a company.

In this case, the journal entry for the purchase of inventory on account using the perpetual inventory system is to record the sale and another one to record the cost of the good.

Learn more about inventory on:

brainly.com/question/24868116

7 0
2 years ago
Marigold Company discovered the following errors made in January 2022.
lys-0071 [83]

Answer:

A. Reversals entry

1. Dr Cash 900

Cr Equipment 900

Correct entry

Dr Wages and salaries 900

Cr Cash 900

B.

2. Dr Cash 5850

Dr Service revenue 650

Cr Account payable $6,500

3. Dr Accounts payable 360

Cr Equipment 360

Explanation:

A. To Correct the errors by reversing the incorrect entry and Preparation of the correct entry.

Reversals entry

1. Dr Cash 900

Cr Equipment 900

Correct entry

Dr Wages and salaries 900

Cr Cash 900

B. To Correct the errors without reversing the incorrect entry

2. Dr Cash 5850

($6500-650)

Dr Service revenue 650

Cr Account payable $6,500

3. Dr Accounts payable 360

(510-150)

Cr Equipment 360

4 0
2 years ago
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