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You are the CEO of a widget manufacturing company. The company is experiencing financial trouble, and needs to produce more widgets in order to stay in operation. In order to encourage your employees, you declare at a meeting that “if everyone works really hard this year and we meet production standards, I’ll give every employee $100.” Employees work unusually hard in response and by the end of the year the firm meets the expected standards. It is also in much better financial condition. Considering both the legal and business implications, evaluate whether or not you should make the payments.

Financial Management, Finance

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