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mrs_skeptik [129]
3 years ago
8

Which one of the following actions by a financial manager is most apt to create an agency problem? Increasing current profits wh

en doing so lowers the value of the company's equity Refusing to expand the company if doing so will lower the value of the equity Refusing to lower selling prices if doing so will reduce the net profits Agreeing to pay bonuses based on the market value of the company's stock rather than on its level of sales Refusing to borrow money when doing so will create losses for the firm
Business
1 answer:
MrRissso [65]3 years ago
6 0

Answer: Increasing current profits when doing so lowers the value of the company's equity.

Explanation:

The main purpose of a company is to increase the wealth of shareholders. In their capacity as stewards for the company, managers should be working therefore to achieve this goal.

When management neglects this goal and begins to seek an improvement in their welfare and wealth instead of the shareholder', this is an Agency problem.

If a Financial manager is increasing current profits even though doing so will lower the value of the company's equity, this can create an agency problem because the shareholders are suffering but the finance manager might get rewarded for increasing profits.

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Professor buchanan informed her colleagues about the various intercom systems she had investigated. she then recommended that th
solmaris [256]

The type of presentation that Professor Buchanan give is sales presentation. Sales presentation is a strategy that involves with selling a product or the product or sales that is provided to the consumers are being closed or is being initiated by the seller. 

8 0
3 years ago
Eve's Apples opened for business on January 1, 2018, and paid for two insurance policies effective that date. The liability poli
Nutka1998 [239]

Answer: 18,000

Explanation:

Liability policy:

Insurance\ expense\ per\ month=\frac{Prepaid\ Insurance\ for\ liability\ policy}{Period\ of\ policy}

Insurance\ expense\ per\ month=\frac{36,000}{18}

                                                            = 2,000

Insurance expense 2018:

= No. of months from 1 Jan 2018 to 31 Dec 2018 × Insurance expense per month

= 12 × 2,000

= 24,000

Prepaid insurance balance for liability policy on 31 Dec, 2018:

= Prepaid Insurance for liability policy - Insurance expense 2018

= 36,000 - 24,000

= 12,000

Crop damage policy:

Insurance\ expense\ per\ month=\frac{Prepaid\ Insurance\ for\ crop\ damage\ policy}{Period\ of\ policy}

Insurance\ expense\ per\ month=\frac{12,000}{24}

                                                            = 500

Insurance expense 2018:

= No. of months from 1 Jan 2018 to 31 Dec 2018 × Insurance expense per month

= 12 × 500

= 6,000

Prepaid insurance balance for crop damage policy on 31 Dec, 2018:

= Prepaid Insurance for crop damage policy - Insurance expense 2018

= 12,000 - 6,000

= 6,000

Therefore,

Total prepaid insurance balance on 31 Dec 2018:

= Prepaid insurance balance for liability policy on 31 Dec, 2018 + Prepaid insurance balance for crop damage policy on 31 Dec, 2018

= 12,000 + 6,000

= 18,000

7 0
3 years ago
The chart indicates the roles of four individuals in the Transportation and Logistics career cluster.
Lady bird [3.3K]

Answer:

Amata is a Traffic Technician, Zeke is a Travel Clerk, Diego is an Automotive Master Mechanic, and Elina is a Logistics Manager.

Explanation:

Traffic Technician prepares graphs, charts, analyzes traffic control policies , plans, accident rates, etc.

Travel Clerk gives travel suggestions, guides, brochures, contacts hotels, motels, etc.

Automotive Master Mechanic tests drives vehicles , engines , repairs, replace, etc.

Logistics Manager deals with customers , sales , orders and shipping.

The Transportation, Distribution, and Logistics Career Cluster has seven career cluster pathways.

  1. Transportation Operations
  2.    Logistics Planning and Management Services
  3.    Warehousing and Distribution Center Operations
  4.    Facility and Mobile Equipment Maintenance
  5.    Transportation Systems/Infrastructure Planning, Management and Regulation
  6.    Health, Safety and Environmental Management
  7.    Sales and Service

The other options given in the question are irrelevant and may not relate to the above 7 categories. For example there is no Shipping and Receiving Clerk.

8 0
3 years ago
Accrued Product Warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of s
Finger [1]

Answer:

a.

Date                     Account Title                                          Debit             Credit

Jan. 31                 Product Warranty Expense                 $15,160

                            Product Warranty Payable                                        $15,160

<u>Working:</u>

Product warranty expense = Amount of sales for January * Estimated product warranty

= 379,000 * 4%

= $15,160

b.

Date                     Account Title                                          Debit             Credit

Jan. 31                 Product Warranty Payable                     $355

                            Supplies                                                                     $250

                            Wages payable                                                          $105

The costs of the warranty will be taken from the liability account for warranties  because the warranty payable account represents that the company owes warranty repairs which the customer just came to collect.

5 0
3 years ago
On January 1, 2018, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $
andreyandreev [35.5K]

Answer:

Consolidated income: 954,800 dollars

Explanation:

Gallow income x race participation:

    $   204,000    x   80%   = $ 163,200

The gross profit in the infra-entity transaction will be eliminated

$ 450,000 - $ 330,000 = $ 120,000 gross profit

15% remains at Gallow so: $ 120,000 x 15% = $ 18,000 gross profit for the unsold inventory.

We now multiply by Race participation: $ 18,000 x 80% = $ 14,400 unrealized gain.

Consolidated income:

Race income:   806,000

Gallo income    163, 200

unrealized gain (14, 400)

Total:                954,800

3 0
3 years ago
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