Incentive systems that pay managers for short-term results may keep them from accepting long-term proposals with a positive net present value.

Question

Quizplus · Accepted Answer

Incentive systems that prioritize short-term results may cause managers to focus on achieving immediate gains rather than investing in long-term projects that may have a positive net present value but require a longer time frame for profitability. This can result in missed opportunities for profitable long-term growth.

Incentive Systems That Pay Managers for Short-Term Results May Keep