At Getahead Inc., management is eligible for a bonus based on the ROA of their individual division. It is currently November 2013, and the components division needs a new machine in order to maintain capacity.The manager of the components division is likely to take what action?

Question

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Given that the manager's bonus is based on the Return on Assets (ROA) and it is already November, purchasing a new machine would increase the asset base without significantly affecting the returns (profits) for the current year. This would likely decrease the ROA in the short term. Therefore, the manager might delay the purchase until after the year-end to avoid negatively impacting the ROA calculation for the current year's bonus.