Question
1...You are the CEO of a firm. Your cash pay comes from a bonus plan. The performance measure used in your bonus plan is earnings
1...You are the CEO of a firm. Your cash pay comes from a bonus plan. The performance measure used in your bonus plan is earnings before interest and taxes. You do not receive a bonus unless earnings before interest and taxes are $50,000. You receive a minimum cash bonus of $100,000 when earnings before interest and taxes are $50,000. Each additional dollar of earnings before interest and taxes above $50,000 gives you an additional $3 in cash bonus. You receive your maximum cash bonus of $190,000 once earnings before interest and taxes reach $80,000. Your cash bonus stays at $190,000 even if earnings before interest and taxes exceed $80,000.
What accounting choices does this bonus plan encourage you to make? Discuss (1 page maximum) 5 pts
2.. You are the same CEO as the one from Question 1. Your company lobbies for subsidies from the government. You are about to finalize your financial reports for the year, and still have some (discretionary) accounting choices to make. Your earnings before interest and taxes are currently (before you make those final discretionary accounting choices) at $100,000.What incentives do you have for making your final discretionary accounting choices, given your bonus plan and the fact that your company lobbies for subsidies from the government. Discuss (5 pts, 1 page maximum)
please anyone can answer theses two questions quicky free of Paralegalism. Thanks
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