CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Assume managers want to maximize bonuses, which are based on current net income. Managers should prefer ______.
A. successful efforts rather than full costing of oil & gas drilling
B. expensing research & development costs
C. using straight-line rather than accelerated depreciation for financial statement purposes

User Contributed Comments 3

User Comment
lagoste using SL instead of DDB, they will increase bonuses in the early years but will reduce in the later years. if so, I believe it is not correct to affirm that this strategy will maximize bonuses. it works only for the short-term... does anyone agree???
xiong managers always focus on short-term goals.
dblueroom The question says bonuses are based on current year net income
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