The managers at Speed Automobile Inc. want to diversify the business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers. The managers correlate this acquisition to greater power for them rather than to the appreciation in shareholder value. In this scenario, this acquisition by Speed Automobile is most likely a result of
A. experience-curve effects.
B. resource ambiguity.
C. principal-agent problems.
D. time compression diseconomies.
Answer: C
You might also like to view...
The matching principle matches balance sheet accounts with income statement accounts
Indicate whether the statement is true or false
In general, a tenant is under a duty to make minor repairs to the leased premises
a. True b. False Indicate whether the statement is true or false
Defects of financial responsibility laws include which of the following? I. Accident victims may not be fully compensated for their injuries. II. They apply only to property damage losses, not to bodily injury claims
A) I only B) II only C) both I and II D) neither I nor II
Organizational information comes in different ___________, formats and granularities.
Fill in the blank(s) with the appropriate word(s).