Harris Corporation pays senior management an annual bonus from bonus pool. The size of the...
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Harris Corporation pays senior management an annual bonus from bonus pool. The size of the bonus pool is determined as follows; Reported Net income Bonus Pool Less than equal to $10 million $0 Greater than $10 million, but less than or equal to $20 million 10% of income in excess of $10 million Greater $20 million $1 million a. Assume a senior management expects current earnings to be $21 million and next years earnings to be $18 million. What incentive does management of Harris Corporation have for managing earnings
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