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1. From a financial reporting standpoint, what form of compensation is most desirable for the firm?

2. List the three bases for bonus incentive plans; explain how they differ and how each achieves or does not achieve the three objectives of management compensation.

3. Identify and explain the six financial ratios used to evaluate liquidity as part of the firm's business analysis.

4. From a tax-planning standpoint, what form of compensation is least desirable for the manager? For the firm?

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