As part of the company's compensation plan,a chief executive officer (CEO) is paid 1% of net profit if net profit exceeds $2,000,000 but no more than $40,000 in a given year.It is estimated that net profit for the year will exceed $4,500,000.Under PAT the CEO will likely adopt which accounting policy:
A) Decrease reported profit as much as he can.
B) Decrease reported profit to $2,000,000.
C) Increase reported profit as much as he can.
D) Increase reported profit up to $4,000,000.
E) Make no change to the initial calculation
Correct Answer:
Verified
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