Excercise V Flashcards
1
Q
Consistency with the net present value rule
A
NPV(earned bonus) = NPV(paid out bonus)
2
Q
EVA Bonus Plan
Bonus
A
= Target bonus + y • (🔼EVA - expected EVA improvement)
Consistency with the net present value rule
NPV(earned bonus) = NPV(paid out bonus)
EVA Bonus Plan
Bonus
= Target bonus + y • (🔼EVA - expected EVA improvement)