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3 years ago

Discuss the corporate control of your business. Explain why your business in Mexico is exposed to agency problems

Business

1 answer:

Wittaler [7]3 years ago

5 0

Answer:

Corporate Control and Agency Problems

For instance, Mr. Jones has a business in Mexico and hires professional managers, but he cannot be there to control their actions always. There are lots of agency problems because of the conflict of interests that is prevalent and the inexistence of goal congruence.

His corporate managers are his agents, as the stockholder. However, most times, these managers do not run the businesses they are entrusted with fiduciary duties in the best interests of Mr. Jones or the principals who appointed them to the positions. They carry out their own agendas and try to satisfy their selfish interests.

Explanation:

Is there any wonder Mr. Jones' business in Mexico is exposed to agency problems? The managers who are your agents will never, at all times, protect your interests in the business. They try as much as possible to satisfy their own interests. Where there is no goal congruence, managers will always expose their principals to agency problems. To curtail these problems, Mr. Jones and the other stockholders must devise means to align the interests of the managers with those of the stockholders. One of the ways of achieving this is through stock compensation and the limitation of compensation in cash.

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A fruit packing plant usually shuts down for three months each year. during that period, what happens to its costs? its fixed co

VikaD [51]

During the three-month period, the plant is not able to produce anything because it shut down. Hence, its variable cost is equal to zero, however, during this period, the fixed cost is still greater than zero because of the process that needs to be done in order to ensure that once the plant is restarted.

For the reason stated above, the most likely answer to this item is the first choice.

7 0

3 years ago

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started

MAVERICK [17]

Answer:

$500 gain and $185 tax

Explanation:

Sale of share = No. of NQOs × No. of shares × Selling price per share

= 10 × 10 × $20

= $2,000

Basis = No. of NQOs × No. of shares × share price @$15

= 10 × 10 × $15

= $1,500

Gain realised = Sale of share - Basis

= $2,000 - $1,500

= $500

The tax is calculated as follows:

= Gain realised × marginal tax rate

= $500 × 37%

= $185

4 0

3 years ago

Operating data for Swifty Corporation are presented below. 2022 2021Sales revenue $830,700 $634,900 Cost of goods sold 529,000 4

Anastaziya [24]

Answer and Explanation:

The preparation of the vertical analysis is presented below:

Particulars Amount % Amount %

Sales $830,700 100 $634,900 100

Less:

Cost of goods sold $529,000 63.7 $415,000 65.4

Gross Profit $301,700 36.3 $219,900 34.5

Less:

Selling Expenses $124,700 15.0 $73,600 11.6

administrative expenses $78,800 9.5 $53,900 8.5

Total Operating

expenses $203,500 24.5 $127,500 20.9

Income before

income taxes $98,200 11.8 $92,400 14.5

Less:

Income tax expenses $33,500 4.0 $23,400 3.7

Net Income $64,700 7.8 $69,000 10.8

Working note

The percentage is like

= Items value ÷ sales × 100

Like for cost of goods sold

= $529,000 ÷ $830,700 × 100

= 63.68%

It is same applicable for other items also

7 0

3 years ago

Billboard advertising is most effective for __________ advertising.

kakasveta [241]

"companies" advertising

5 0

3 years ago

If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment

Ivanshal [37]

Answer:

The correct answer to the following question is D) interest rates would be increased by the government when there is almost full employment in the economy.

Explanation:

When in the economy, business are producing close to productivity and in the nation there is almost full employment , then it can be said that the economy is booming . Which means there is good amount of money supply in the economy and people are spending robustly and that means the demand is high , which ultimately tells that the prices of goods and services are high.

So to cut the prices, government will increase the interest rate which will lead to the increase in cost of borrowing, and that will cause decrease in money supply and demand will ultimately fall, which leads to decrease in prices of goods and services.

3 0

3 years ago