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Firms often use financial performance targets to determine bonus (incentive) compensation for managers. If a firm used a targeted percentage increase in sales, (for ex, the goal might be to increase sales by 5%) or a targeted profit margin on sales (the goal might be to achieve a 10% profit margin), how might management achieve these goals? What are the downsides to using these financial targets to determine bonus compensation?

Basic Finance, Finance

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  • Reference No.:- M941811

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