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3 years ago

An agency problem can occur when_____________.

Business

1 answer:

AlladinOne [14]3 years ago

7 0

Answer:

A) the desires and objectives of the owners and agents conflict.

Explanation:

An agency problem occurs when there is conflict of interest in a situation where one part is expected to act in the best interest of the other.

In finance this usually occurs between the management and stockholders, the manager is an agent for the stockholder (principal). The manager is expected to run the business and make profit for the principal and may instead maximise his own wealth.

Agency problem arises when an agent is motivated to act in his own interest and not fully for his principal.

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At the beginning of the current period, Marin Corp. had balances in Accounts Receivable of $195,100 and in Allowance for Doubtfu

melamori03 [73]

Answer:

The journal entries are as follows:

(a) (i) Sales A/c Dr. $745,500

To Accounts receivable A/c $745,500

(To record the sales)

(ii) Cash A/c Dr. $835,120

To Accounts receivable A/c $835,120

(To record the collections)

(b) Allowance for doubtful accounts A/c Dr. $7,831

To Accounts receivable A/c $7,831

(To record the write-off of uncollectible accounts during the period)

To Allowance for doubtful accounts A/c $3,184

(To record the recovery of the uncollectible account)

Cash A/c Dr. $3,184

To Accounts receivable A/c $3,184

(To record the recovery)

(d) Bad debts expense A/c Dr. $19,397

To Allowance for doubtful accounts $19,397

(To record the bad debt expense for the period)

Workings:

Bad debts expense:

= $24,100 - (9,350 - 7,831 + 3,184)

= $19,397

7 0

3 years ago

Analysis reveals that a company had a net increase in cash of $22,750 for the current year. Net cash provided by operating activ

aalyn [17]

Answer:

The correct answer = $5,000

Explanation:

First of all, let us find the difference between the total cash provided and the total cash used up within the period:

Total cash provided = operating activities + financing activities

Total cash provided = 20,500 + 13,500 = $34,000

Total cash used up = investing activities = $11,250

Retained balance from the activities of the period = Total cash provided - Total cash used up

= 34,000 - 11,250 = $22,750

Retained balance from the activities of the period = $22,750

However, we are told that the year-end cash balance = $27,750. This means that the excess cash on the retained balance from operating activities within the period is from the beginning cash balance, and this is calculated as follows:

year-end cash balance = Retained balance from the activities + beginning cash balance

27,750 = 22,750 + beginning cash balance

∴ beginning cash balance = 27,750 - 22,750 = $5,000

∴ beginning cash balance = $5,000

5 0

3 years ago

Hillary graduates from law school and gets a position in a law firm. At the same time the price of hamburger falls while other f

LiRa [457]

Answer:

no, since other things are not held constant, including her income

Explanation:

The law of demand states that price has an inverse relationship with quantity demanded of a good. As price increases the demand reduces, and as price decreases quantity demanded increases.

However this is true when all other factors reman constant.

In the given scenario the price of hamburger has fallen but Hilary buys less of it. This looks like a violation of the law of demand, but her income has changed so the law of demand may not hold here.

All factors do not remain constant.

Hilary's behaviour can be explained by the concept income effect. Where an increase in income leads to the consumer buying more of expensive goods than cheaper ones.

5 0

3 years ago

What are the cost and consequences of providing welfare payments and consumer subsidies

olganol [36]

The cost is clearly came from the national Budget. By providing welfare payments and subsidies, there will be less budget for other Government's plan.

As for the consequences, there are positive and negative consequence
Positive :
- It could improve the quality of life of the people in that country

Negative :
- There's a risk that people could rely on the welfare too much and became heavily dependent on it

4 0

3 years ago

What would be the net present value of a microwave oven that costs $167 and will save you $76 a year in time and food away from

Luda [366]

Answer:

NPV of the microwave: 162.04

Explanation:

we will calcualte the present value of the microwave cost savings of 76 dollars per year using the annuity formula:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 76 dollars

time 5 years

rate 0.05

$76 \times \frac{1-(1+0.05)^{-5} }{0.05} = PV\\$

PV $329.0402

The net present value will be the present value less investment

329.04 - 167 = 162.04

4 0

3 years ago