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Zinaida [17]
2 years ago
12

A company scientist at a biotechnology company decides to work on his own research project, hoping to eventually start his own f

irm, rather than on the project he was assigned. However, the company's stockholders are unaware of this situation. This is an example of a(n) ________ in the context of a principal-agent problem.
Business
1 answer:
horsena [70]2 years ago
8 0

Answer:

The correct answer is letter "C": moral hazard.

Explanation:

In the principal-agent problem, Moral Hazard represents actions taken by employees of an organization for their benefits instead of the company's. The term extends to many other fields such as financing with similar connotations. Moral hazard, in general, is described as the risk one party takes knowing that another party will have to suffer the consequences.

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If sales are $540,000, expenses are $440,000 and dividends are $50,000, what is the balance of income Summary prior to closing?
alexandr402 [8]

Answer:

d. It will have a credit balance of $100,000.

Explanation:

In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

So, the balance of income summary equals to

= Sales - expenses

= $540,000 - $440,000

= $100,000

The dividend should be deducted from the retained earning account. Hence, it will not be consider here

7 0
3 years ago
​(Cash management​) As CFO of Portobello Scuba Diving Inc. you are asked to look into the possibility of adopting a lockbox syst
zheka24 [161]

Answer:

Check the answers below

Explanation:

  • The per instrument cost of the bank is $0.25. Assuming uniform cheque value, the 24 million remittances across 10000 cheque will mean per cheque value of 2400. If this amount can be invested at 8% p.a., then daily investment income will be approx = 2400 * 8% /365 = $ 0.526

  • Now for the company to jus about cover the cost of the cheque processing, the time should reduce by (assuming fractional time in days is possible) 0.25/0.526 = 0.48 days

  • Now if the interest that can be earned reduces to 4%, the average daily interest will also reduce to $0.263. At this level, the time required to cover the cost should reduce by 0.95 days

The difference is simply because the opportunity cost in terms of alternate usage of funds has decreased for the company.

8 0
2 years ago
On October 1, Robertson Company sold inventory in the amount of $5,800 to Alberta, Inc. with credit terms of 2/10, n/30. The cos
NeTakaya

Answer:

Option (d) is correct.

Explanation:

Given that,

Inventory sold to Alberta, Inc. on account = $5,800

Cost of goods sold = $4,000

The journal entries are as follows:

(i) On October 1,

Accounts receivable A/c Dr. $5,800

           To sales A/c                             $5,800

(To record the credit sale of inventory)

(ii) On October 1,

Cost of goods sold A/c Dr. $4,000

         To Merchandise inventory A/c     $4,000

(To record the cost of goods sold)

4 0
3 years ago
On January 3, 2018, Austin Corp. purchased 25% of the voting common stock of Gainsville Co., paying $2,500,000. Austin decided t
monitta

Answer:

The total amount of excess amortization for Austin’s 25% investment in Gainsville is $30,000.

Explanation:

total proportions from building, equipment and franchises

= building proportion over 10 years + equipment proportion over 5 years + franchises proportion over 8 years

= ($ 500,000 - $ 400,000)/(10) + (1,300,000 - 1,000,000)/(5) + ($ 400,000-$0)/(8)

= $100,000/10 + $300,000/5 + $400,000/8

= $10,000 + $60,000 + $50,000

=$120,000

Excess Amortization = 25%(total proportions from building, equipment and franchises)

                                  = 25%($120,000)

                                  = $30,000

Therefore, the total amount of excess amortization for Austin’s 25% investment in Gainsville is $30,000.

3 0
3 years ago
If you want to compare two different investments, what should you calculate?
Alexandra [31]

Answer: B - ROI percentages

Explanation:

edge 2020

6 0
3 years ago
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