Under what conditions are shareholders likely to incur agency costs when managers make capital budgeting decisions?
What will be an ideal response?
Answer: When managers are not major shareholders of the company, their self-interest may not coincide with the interests of shareholders. Managers may avoid risky but potentially rewarding proposals and the additional effort and scrutiny that come with raising outside capital.
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Which of the following is not a typical way that a company would duplicate a competitive advantage?
A. Hiring away key employees. B. Acquiring the new technology. C. Copying the business operations. D. Carrying large product inventories.
The following information appears in Molsone Company's records for the year ended December 31: Inventory, January 1 .................................. $ 325,000 Purchases ............................................. 1,150,000 Purchase returns ...................................... 40,000 Freight-in ............................................ 30,000 Sales
................................................. 1,700,000 Sales discounts ....................................... 10,000 Sales returns ......................................... 15,000 On December 31 . a physical inventory revealed that the ending inventory was only $210,000 . Molsones gross profit on net sales has remained constant at 30 percent in recent years. Molsone suspects that some inventory may have been pilfered by one of the company's employees. At December 31 . what is the estimated cost of missing inventory? a. $75,000 b. $82,500 c. $210,000 d. $292,500
Which of the following statements is true about the Great Recession?
a. Tweens are the most affected by it. b. It increased inflation rates to almost ten percent. c. It began with the collapse of inflated housing prices. d. It increased employment rates to almost ten percent.
Two big benefits of ABC costing are a) more accurate product cost information and b) more detailed information on costs and the drivers of those costs.
Answer the following statement true (T) or false (F)