Question 1
Flow-through entities include all of the following types of entities
except◦ partnerships.
◦ C corporations.
◦ S corporations.
◦ limited liability companies (LLCs).
Question 2
Given that D
n is the amount of deferred compensation received in lieu of $1 currently, which one of the following decision rules can the employee and the employer apply when evaluating whether deferred compensation is preferable to current salary?
◦ If the employee's indifference level of D
n exceeds the employer's indifference level of D
n, the employer will pay deferred compensation up to the employee's indifference level.
◦ If the employee's indifference level of D
n is less than the employer's indifference level of D
n, the employee will only receive a current salary because the employer will not pay the employee's required deferred compensation.
◦ If the employee's indifference level of D
n is less than the employer's indifference level of D
n, the employer can pay deferred compensation up to its indifference level.
◦ None of the decision rules in If the employee's indifference level of D
n exceeds the employer's indifference level of D
n, the employer will pay deferred compensation up to the employee's indifference level, If the employee's indifference level of D
n is less than the employer's indifference level of D
n, the employee will only receive a current salary because the employer will not pay the employee's required deferred compensation, or If the employee's indifference level of D
n is less than the employer's indifference level of D
n, the employer can pay deferred compensation up to its indifference level hold true.
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