Why do you think business managers prefer smooth earnings

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Reference no: EM133717086

Problem

Income smoothing has been defined as the reducing of fluctuations about some level of earnings that is considered normal for the company Research has indicated that income smoothing occurs because business managers prefer a stable rather than a volatile earnings trend Why do you think business managers prefer smooth earnings? Discuss at least two methods that managers can use to smooth earnings. Explain in 7 sentences.

Reference no: EM133717086

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