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tatiyna
3 years ago
6

Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders? a

. Take actions that reduce the possibility of a hostile takeover. b. Decrease the use of restrictive covenants in bond agreements. c. Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries. d. Elect a board of directors that allows managers greater freedom of action.
Business
1 answer:
Paraphin [41]3 years ago
5 0

Answer:

c. Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries.

Explanation:

Agency problem arises when the interest of shareholders and managers are at odds.

BY increasing the proportion of compensation from stock options, managers would be more interested taking actions that would increase stock value because if stock value increases, managers income would also increase.

You might be interested in
You wish to retire in 15 years, at which time you want to have accumulated enough money to receive an annual annuity of $31,000
kupik [55]

Answer:

$ 5,507.47

Explanation:

There are two steps involved in solving this question ,first we need to determine the present of annuity of $31,000 receivable per year after retirement  at retirement date,then use that to calculate the annual contribution:

=-pv(rate,nper,pmt,fv)

rate is the rate of interest during retirement which is 14%

nper is the period during which the $31000 would be received which is 20

pmt is the $31000 annuity per year

fv is the future worth of the annuity which is unknown

=-pv(14%,20,31000,0)=$ 205,317.05  

The present value above is the future value of the retirement contributions

annual contribution=pmt(rate,nper,pv,-fv)=pmt(12%,15,0, 205317.05) =$ 5,507.47

5 0
2 years ago
Branford Inc. reported the following results from the sale of 24,000 units of SR-90:
Liula [17]

Answer:

d. None of the answers is correct

$17,000 increase

Explanation:

As per the given question the solution is provided below:-

For reaching the change in income if the special order is accepted we need to follow some steps which are as follows:-

Step 1

Variable manufacturing cost per unit = Variable manufacturing costs ÷ Sale units

= $240,000 ÷ 24,000

= $10

Step 2

Cost related with special order = Number of units × Variable manufacturing cost per unit

= 3,400 × $10

= $34,000

Step 3

Income from special order = Number of units × Selling price

= 3,400 × $15

= $51,000

Therefore the Change in income if special order is accepted = Income from special order- Cost related with special order

= $51,000 - $34,000

= $17,000 increase

d. None of the answers is correct the right answer is $17,000 increase.

To reach the change in income if special order is accepted we simply put the values into formula.

3 0
2 years ago
Helmers Corporation manufactures a single product. Variable costing net operating income last year was $74,000 and this year was
gogolik [260]

Answer:

$46,400

Explanation:

The computation of the absorption costing net operating income last year is shown below:

= Net operating income under variable costing + Fixed overhead deferred in ending inventory - Fixed overhead released in beginning inventory

= $74,000 + $0 - $27,600

= $46,400

All other information which is given in the question is not relevant. Hence, ignored it

4 0
3 years ago
Financial statement data for years ending December 31, 2019 and 2018, for Edison Company follow: 2019 2018 Sales $513,500 $480,0
madam [21]

Answer:

The answer is

For 2018 - 1.5

For 2019 - 1.3

Explanation:

Asset turnover ratio=Net sales/average total assets

For 2018:

Sales - $480,000

Beginning asset - 360,000

Ending asset -360,000

Average total asset:

($280,000 + $360,000)/2

=$320,000

Therefore, asset turnover for 2018 is:

$480,000/$320,000

=1.5

For 2019:

Sales - $513,500

Beginning asset - $360,000

Ending asset - $430,000

Average total asset:

($360,000 + $430,000)/2

=$395,000

Therefore, asset turnover for 2019 is:

$513,500/$395,000

=1.3

5 0
2 years ago
Cartier corporation currently sells its products for $50 per unit. the company's variable costs are $20 per unit. fixed expenses
charle [14.2K]
The answer is 40%, in which the following are given: the Variable expense is equal to 20 dollars per unit and Sales is equal to 50 dollars per unit. Use the formula Variable Expense Ratio = Variable Expenses / Sales to get the answer. 

Variable Expense Ratio = Variable Expenses / Sales
Variable Expense Ratio = 20 dollars per unit / 50 dollars per unit
Variable Expense Ratio = 40 %

The variable expense ratio is an expression of variable production costs of the company as a percentage of sales, calculated as variable expense divided by total sales. It compares a cost that alters with levels of production to the number of revenues generated by production.
8 0
3 years ago
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