The benefits of tying performance measures more closely to a manager's efforts encourage the use of

A. performance input measures.

B. nonfinancial measures.

C. nonfinancial and financial measures.

D. moral measures.

E. financial measures.

Give three definitions of investment used in practice when computing ROI.

A. Total assets available, total assets employed, and total assets employed minus current liabilities

B. Shareholders' equity, total assets available, and total assets employed minus long-term liabilities

C. Total assets employed, total assets employed minus long-term liabilities, and shareholders' equity

D. Total assets employed minus liabilities and shareholders' equity, total assets available, and shareholders' equity

E. All of the above

F. Only A, B, and C are correct

Explain the incentive problems that can arise when employees have to perform multiple tasks as part of their jobs.

(Select all that apply.)

A. When employees have to perform multiple tasks as part of their jobs, incentive problems can arise when one task is easy to monitor and measure while the other task is more difficult to evaluate.

B. An incentive problem arises when employees are rewarded equally on the basis of the multiple tasks they perform. Therefore, they will tend not to focus their efforts on any particular task.

C. When employees have to perform multiple tasks as part of their jobs, they have to work in teams. Team-based incentive compensation creates competition among employees.

D.Incentive problems can arise only when employees have to perform single tasks as part of their job because individual-based incentive compensation rewards employees for their own performance, which is not consistent with responsibility accounting.

E. Employers want employees to intelligently allocate time and effort among various tasks. If, however, employees are rewarded on the basis of the task that is more easily measured, they will tend to focus their efforts on that task and ignore the others.