Answer:
The correct answer is letter "B": The agent has different incentives than does the principal.
Explanation:
Incentive conflicts more often called principal-agent problems arise when a <em>principal </em>(stakeholder) hires an <em>agent </em>(manager) to handle businesses on behalf of the principal but the principal's interest is different from the agent's purpose.
Agents are paid for following the principal's instructions but in most cases, when it comes to decision-making, the point of view of the agent differs from the position of the principal. The principal's point of view is typically self-biased.
Answer:
The most suitable answer here is D. Concurrent Control.
Explanation:
Concurrent control is also known as preventive controls and steering controls where the aim of the control procedure is to identify the possible flaws of a process and to prevent them before occurring.
Furthermore, in this scenario as you can see, Donald consults production manager and formulates measures as the process is ongoing. This makes it more of a "concurrent control" as well.
So Why did we not use any of the other options?
Option A, reactive controls is incorrect in this case, because reactive measures are completely spontaneous actions that respond to an accident.
Option B is incorrect too, because feedback controls are done after a process has been completed and through identification of falls happened.
Option C, feed forward controls are not correct in this scenario as well. Although it is a type of preventive control, in this scenario it is not entirely preventive. They are formulating measures even as the process is ongoing.
Answer:
b. Maximize owner's wealth.
Explanation:
The owners wealth is usually measured by the financial behaviour of shares. In that sense we can find two reasons why is so important for the firm's management.
1. The managers recieve a greater compensation when the performance of the share increases their value. The managers have an incentive in order to keep the price of shares high.
2. Is a market oriented reason. For shareholders, consumers, banks and stakeholders, a good performance of the share is a positive signal for future investments, quality of the services and products and stability in the long run.
Answer:
D. Currency exchange risk
Explanation:
If you must deal with only domestic long term investments, then you should not worry about the currency exchange risk. The currency exchange risk is extremely relevant and important when you are dealing with investments in foreign countries. The currency exchange risk refers to risks associated with the US dollar depreciating or appreciating against other foreign currencies.
Answer:
The correct answer is A
Explanation:
Seasoned loan is the loan which is defined as the loan that has been made out for at least a year, in which the borrower of the loan has a good history in relation to the payment of the loan. It is considered a sign that the loan will be unlikely to default. And it may command the higher prices on the secondary market.
In short, it is defined as the loan which has been paid on time and the adequate amount of time to give the lender, the belief that it will be continue in this way.
So, it is a loan with the payment record of the payments made by the borrower.
