Principal-Agent Problems Are Less Likely to Arise

question 187

Multiple Choice

Principal-agent problems are less likely to arise

• A)if it is easy for principals to know agents' actions and if there is less conflict between their goals
• B)if it is difficult for principals to know agents' actions and if there is less conflict between their goals
• C)if it is easy for principals to know agents' actions and if there is some difference in their goals
• D)if it is difficult for principals to know agents' actions and if there is some difference in their goals
• E)if agents have higher incomes

---

Definitions:

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment, and financial activities.

Noncash Investing

Transactions that involve the exchange of non-monetary assets or liabilities for other non-monetary assets or liabilities, without the use of cash.

Net Increase in Cash

The total change in cash and cash equivalents indicating the difference between cash inflows and outflows over a period.

Presentation of Activities

The structured detailing of actions taken or planned by an organization, often applied in the context of reporting or strategic planning.