Which of the Following Offers an Explanation as to Why

question 60

Multiple Choice

Which of the following offers an explanation as to why the principal-agent problem exists for a firm?

• A)The firm cares less about profit and more about cost when there are many competitors in the market.
• B)The firm offers an employee-incentive program in which employees share in the firm's profits.
• C)The firm operates in a market with many competitors forcing the firm to pay its employees more to keep them from switching to another firm.
• D)The firm operates to maximize profit while the employees attempt to work as little as possible to earn their paychecks.

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Definitions:

Waiver Of Presentment

An agreement to waive the formal presentation of an instrument, such as a check or draft, for payment.

Notice Of Dishonor

A formal notification indicating that a negotiable instrument, such as a check, has been refused payment.

Certified

Officially recognized or verified, often by a certification body, as meeting a specific standard or criteria.

Discharged From Liability

A condition where an individual or entity is legally released from an obligation or debt.