Which One of the Following Statements Is TRUE

question 37

Multiple Choice

Which one of the following statements is TRUE?

• A) Personal use of the corporate jet is an example of a nonpecuniary benefit.
• B) A supplier substituting a lower-quality raw material without approval is an example of asset switching.
• C) An agency problem occurs when an owner/manager sells stock to an outside investor and the owner/manager fears the outside investor will consume too many perquisites.
• D) An agency conflict between inside owners/managers and outside owners occurs when the outside owners sell their shares to someone else.
• E) A quarter-end bonus is an example of a nonpecuniary benefit.