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Question
The most widely-used depreciation method for U.S. income tax purposes is
A. sum-of-the-years' digits.
B. MACRS.
C. straight-line.
D. units-of-production.
Answer
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Related questions
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A factor that can reduce managers' short-term focus is the fact that incentive compensation plans are administered by a compensation committee that can intervene when circumstances warrant modification of the scheduled incentive award.
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The wide use of accounting-based incentives is controversial because earnings growth does not automatically translate into increased shareholder value.
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Managerial strategies and decisions clearly affect stock prices both in the short and long run.
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Borrowers do not appear willing to pay substantially higher interest rates to retain accounting flexibility that may help them avoid covenant violations.
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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Financial covenants establish minimum financial tests with which a borrower must comply.
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Commercial lending agreements may contain provisions that are designed to protect the lender from a deterioration of the borrower's creditworthiness.
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Risky firms have a higher risk-adjusted cost of capital. Which one of the following factors would contribute to that firm also having a high price/earnings ratio?
A. High earnings per share.
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Rate regulation provides incentives for public utility managers to
A. artificially decrease the asset base.
B. artificially increase the asset base.
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In the utilities industry, rate formulas are established to allow the utilities to set total allowed revenues to recover
A. only the administrative costs of operations.
B. only the operating costs associated with operations.
C. all operating costs, depreciation, taxes, and a fair return on invested capital.
D. all operating costs other than depreciation and taxes, and a fair return on invested capital.
Q:
Compensation incentives that motivate and reward executives for five years of growth and prosperity are called
A. base salaries.
B. short-term incentives.
C. long-term incentives.
D. executive compensation packages.
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A. affirmative restrictions.
B. affirmative covenants.
C. negative restrictions.
D. negative covenants.
Q:
Debt covenants benefit
A. lenders.
B. borrowers.
C. both lenders and borrowers.
D. neither borrowers nor lenders, but are required by the SEC as a condition of issuing debt securities.
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A. few business relationships.
B. only relationships between investors and managers.
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D. many business relationships.
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A. the consignor.
B. the consignee.
C. both the consignor and the consignee.
D. neither the consignor nor the consignee.