Question 1)

Choose the alternative that best fits the following situation. Offer incentives to executives that depend on a short-term measure, such as the current year's accounting profit:

Select one alternative:

A. Can get the executive to focus on maximizing shareholder wealth.

B. It may cause the executive to make decisions aimed at improving this year's accounting profit, sacrificing future growth

C. It can eliminate the agency problem

D. It is worse than offering no incentive at all

Question 2)

Companies often set goals to be achieved as a sign of good management. The goals are observed through an indicator. Which of the following indicators would you choose to evaluate the performance of the General Manager of a company, in a given year, considering that for this company its competitive situation in the industry in which it operates is key?

Select one alternative:

A. ROA for the year

B. ROA for the year, as a proportion of the competitors' ROA for the same year.

C. Operating profit margin as a percentage of sales.

D. Sales for the year

Question 3)

Over the past three years, a company has had sales growth of 2% per year, while the industry average growth was 1.5%. The owners of the firm decide to implement a BSC and set goals to incentivize employees to work toward increasing the value of the company. The environmental conditions that prevailed last year are expected to continue this year. Which of the following is an example of a good goal that the owners could set for next year's sales growth?

Select one alternative:

A. 0%

B. 1,5%

C. 3%

D. 15%

Question 4)

The top executive of a business unit that has business relationships with other business areas of the company:

Select one alternative:

A. Should receive an incentive based on the performance of the company as a whole.

B. He should receive an incentive based solely on the performance of his unit.

C. He should receive an incentive based on both his unit's performance and the performance of the company as a whole

Question 5)

Which of the following compensation schemes unerringly aligns the interests of employees with those of the company?

Select one alternative:

A. A fixed salary and cash bonus

B. A fixed salary and a stock bonus

C. A fixed salary and the delivery of stock options

D. None of the above

D. He should not receive any incentive at all