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Where management's bonuses are tied to profit-based performance measures, management may have an incentive not to revalue assets because: when revaluing assets, the value of
Where management's bonuses are tied to profit-based performance measures, management may have an incentive not to revalue assets because:
when revaluing assets, the value of the asset base increases, consequently the return on assets will fall. | ||
a revaluation may result in a decrease in the value of the asset base. | ||
a revaluation that increases the value of the asset base will increase profit measures. | ||
when revaluing assets, the value of the asset base increases, consequently the debt to equity ratio will fall. |
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