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3 years ago

A large corporation suffers from the principal-agent problem when its:

Business

2 answers:

bija089 [108]3 years ago

8 0

Answer:

The correct answer is letter "B": board of directors ties the salaries of management exclusively to the profits of the firm.

Explanation:

Principal-agent problems arise when a principal hires an agent to perform duties that conflict with the agent's best interest. The problem typically occurs when the principal provides incentives to act in the principal's interest but not the agent, generating a conflictive agenda.

In that case, if the boards of directors tie the salaries of management according to the profits of the firm, they will be acting on their own interest but not in the interest of the managers, making option "B" to represent a typical principal-agent problem.

amm18123 years ago

7 0

<span>The correct answer is d. management does not own a large share of firm stock and pursues its own interests rather than those of shareholders.When management pursues its own interests, there is a conflict with the interest of the shareholders who hired the management in the first place.</span>

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What is the most efficient level of output and correponding marketer-hours in the short-run?

algol [13]

The most efficient level of output and corresponding marketer hours in the short-run is capital for a time period of fewer than four-six months.

The short run is an idea that within a certain time period, at least one input is fixed while others remain variable. In the short run, firms face both variable and fixed costs, which means that wages, output, and prices do not have full freedom to reach a new equilibrium.

In the short run one factor of production, for instance capital is fixed. This is a time period of fewer than four-six months. In the short run, the firm should increase output as long as marginal revenue exceeds marginal cost, and reduce output if marginal revenue is less than marginal cost.

Hence, in the short run, a firm decides how much output to produce in the current facility.

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2 years ago

Smart Manufacturing budgeted costs for 50,000 linear feet of block are: Fixed manufacturing costs $24,000 per month Variable man

Gekata [30.6K]

Answer:

$664,000

Explanation:

The computation of the budgeted total manufacturing cost is shown below:

Budgeted total manufacturing costs is

= Fixed cost + Variable cost

= $24,000 + ($16 × 40,000 linear feet of block)

= $24,000 + $640,000

= $664,000

We simply added the fixed cost and the variable cost so that the total budgeted manufacturing cost could come

3 0

3 years ago

Kline Construction is an all-equity firm that has projected perpetual EBIT of $360,000. The current cost of equity is 13.3 perce

Aleksandr [31]

Answer:

Value of Levered Firm is 1,728,095

Explanation:

As company has total equity based, So, the cost of equity will be the discount rate to calculate the value of equity.

Value of Equity = $360,000 ( 1 - 0.4 ) / 13.3% = $1,624,060

Value of Debt = $976,000

Total value = $1,624,060 + $976,000 = $2,600,060

Now calculate the WACC

WACC = (13.3% x $1,624,060/$2,600,060) + (5.9% x $976,000/$2,600,060)

WACC = 8.3% + 2.2%

WACC = 10.5%

Now Assuming the EBIT remains the same.

Value of the firm = [ ( $360,000- (976,000 x 5.9%) ) x ( 1 - 0.4 ) ] / 10.5%

Value of the firm = $181,450 / 0.105 = 1,728,095

8 0

2 years ago

Amanda is a twenty-four year old student. For two years Amanda has been going to gym and using weight equipment, stationary bicy

Marta_Voda [28]

Answer:

e. All of the other choices

Explanation:

Product liability is the responsibility that a company bears for injury caused by its products as a result of a defect.

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So for any injury users have they will be liable.

If Amanda files a lawsuit against Musclematic they will have to consider:

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- Whether this suit will adversely affect other business relationships

- The costs associated with litigating this claim

This is because they will most likely lose the case.

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3 years ago

yamaha incorporated hires a new chief financial officer and promises to pay him a lump-sum bonus four years after he joins the c

4vir4ik [10]

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1 year ago

A large corporation suffers from the​ principal-agent problem when​ its:

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