For the Situations Described Below, Explain Whether Managers Would Be

For the situations described below, explain whether managers would be motivated to manage earnings, assets, and equity upward and liabilities downward, or alternatively, managers may be motivated to manage earnings, assets, and equity downward and liabilities upward.
$$\begin{array} { l | l | } \hline \text { Situation } & \begin{array} { l } \text { Management motivation } \\\text { (Upward / Downward) }\end{array} \\\hline \text { To influence investors to pay more for the firm's } \\\text { shares. } & \\\hline \text { To reduce the likelihood of additional taxes or } & \\\text { regulations. } & \\\hline \begin{array} { l } \text { To take a "big bath" in a bad year by recording } \\\text { more expenses than usual so that future years } \\\text { are more likely to show higher and rising } \\\text { profitability, resulting in higher future } \\\text { compensation or stock price. }\end{array} & \\\hline \text { To reduce riskiness of its cash flows and obtain } & \\\text { funds from the bank at a lower interest rate. } & \\\hline \begin{array} { l } \text { To obtain a stronger bargaining position in } \\\text { merger negotiations. }\end{array} & \\\hline\end{array}$$

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