From a Business Owner's Perspective, Which of the Following Is

question 7

Multiple Choice

From a business owner's perspective, which of the following is an agency cost?

• A) Costs to provide appropriate incentive contracts for top management
• B) General supplier price increases
• C) Losses from poor economic conditions
• D) Insufficient executive pay

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Definitions:

Throughput Accounting

An accounting method that focuses on the rate at which a company generates money through sales, emphasizing the bottlenecks in the production process.

Financial Measures

Metrics used to assess a company's performance in terms of profitability, liquidity, solvency, and operational efficiency.

Bottleneck

A point of congestion or blockage in a production system that significantly reduces efficiency.

Theory of Constraints

A management philosophy focusing on identifying and relieving bottlenecks in processes to improve performance.