Answer:
C.principal-agent problems.
Explanation:
The acquisition of Movo Automobile is a typical example of AGENCY COST. Under the Agency cost theory, managers are agents of shareholders who represents principal in the principal - agent problem.
Agency cost is a situation where agents become selfish and pursue strategies and policies that will promote the self interest of agents and cause dissatisfaction to principals.
a condition or state of affairs almost beyond one's ability to deal with and requiring great effort to bear or overcome. "grappling with financial difficulties"
Answer:
the Digby Corporation's total liabilities is $156.92 million
Explanation:
The computation of the total liabilities is given below:
Total Liabilities is
= Total Asset - (Total Common Stock + Retained Earnings)
= $210.761 - ($6.350 + $47.491)
= $210.761 - $6.350 - $47.491
= $156.92 million
Hence, the Digby Corporation's total liabilities is $156.92 million
The same should be relevant
<span>Return on equity = 11.28 percent = 11.28/100 = 0.1128
debt-equity ratio =1.03
total asset turnover = 0.87
return on assets = ?
we can find return on assets by using the formula
= return on equity / (1 + debt equity ratio)
= 0.1128 / (1 + 1.03)
= 0.1128 / 2.03
= 0.0556 = 0.0556 x 100 = 5.56%
So, the return on assets is 5.56%</span>
Answer:
B. Implied warranty of fitness
Explanation:
An implied warranty of fitness for an specific purpose refers to the fact that if the seller of a product knows that the product will be used for an specific purpose and that the buyer is purchasing that product for that using it that way, then an implied warranty of fitness is formed. In this case, the seller knew that Palmer was going to carry 5,000 pounds in the truck and therefore, by offering a certain truck to Palmer, an implied warranty of fitness was formed stating that the truck could carry that load.
