All categories

2 years ago

What do economists call the situation where a hired manager does not have the same interests as the owners of the business?

1 answer:

6 0

When a hired manager does not have the same interests as the owners of the business, economists call it a principal-agent problem.

A principal-agent problem occurs when there is a conflict of interest between the owner(s) of the asset and the hired representative. This happens when a degree of control and decision-making is delegated to the hired individual. The risk that they will make decisions that are contrary to the owner’s best interest is called agency costs and is carried by the owner. It is the owners' responsibility to provide incentives for the hired manager or individual to act in favor of their same interests.

While the options are incorrect because:

Conquest and control: A hired manager is only delegated partial control and limited decision-making. Which can affect the interests of the owner but has neither the ownership of the asset nor carries the liability of loss and profit.
A financial problem: Financial problems refer to monetary problems including, excess debt, lack of savings, struggles with daily living, and bad spending habits.
A financial intermediary problems: A financial intermediary is a third party hired to manage and conduct financial transactions between two parties and are legally obliged to follow certain policies and guidelines.

You can learn more about principle-agent problem at

brainly.com/question/14800593

#SPJ4

You might be interested in

Suppose social security contributions rise by $1 billion while social security benefits also rise by $1 billion. Further, per

Nadya [2.5K]

Answer:

The answer will be A

Explanation:

As the social security contributions and benefits remain the same in proportion, personal and national income will remain the same.

As disposable income is defined as personal income-personal taxes, and the personal income taxes fall by 500 million (included in the contibutions), this would mean that the disposable income increases.

8 0

4 years ago

Cooper Grant is the president of Acme Brush of Brazil the wholly owned Brazilian subsidiary of U.S.-based Acme Brush Inc. Cooper

jarptica [38.1K]

Answer:

THINKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKK

Explanation:

4 0

4 years ago

Emporia Corporation is a lessee with a capital lease. The asset is recorded at $810,000 and has an economic life of 8 years. The

Doss [256]

Answer:

The amount of depreciation expense the lessee should record for the first year of the lease is $108,000

Explanation:

To calculate the depreciation expense for each year the first thing you have to do is to substruct from the initial value the fair value at the end fo the lease, obtaining this way the depreciable amount.

For this case it would be:

$810,000 - $270,000= $540,000

Then you have to divide the depreciable amount by the years of the term the lease.

$540,000/5= $108,000

4 0

3 years ago

The price of apples used to make apple pies has decreased. At the same time, people expect the price of apple pies increase sign

vlabodo [156]

Answer:

the correct answer is "Equilibrium quantity will increase; the effect on price is ambiguous"

Explanation:

The supply will increase as the cost of production of apple pies has diminished. The curve of the graph for supply will move to the right.

In the event that customers expect the future costs of apple pie rises, they will stock up now and the interest for apple pie will rises. The curve of the demand graph move to right.

At the point when both demand and supply graph curve bends a similar way, the harmony amount will increase however the impact on balance cost is indeterminate.

7 0

3 years ago

Read 2 more answers

At Value Inc., there are specific steps to be followed when applying for a day off. First, an employee has to apply to his or he

Gnoma [55]

Answer:

<u>Procedures</u>

Explanation:

Procedures refer to protocols and guidelines to be adhered to while performing an act.

Those are management rules which determine management action. Procedures are carried out following certain set of rules which are commonly applicable. Procedures could be stringent at times.

In the given case, the employees in order to get something (leaves) from the management, have to follow a prescribed set of rules in a sequence which would lead to the desired outcome.

Though procedures could be cumbersome and time consuming, just like in the given case, those have to be followed and adhered to by an organization and it's people.

7 0

3 years ago