Use the Following Information for the Next 3 Questions

question 23

Multiple Choice

Use the following information for the next 3 questions.
Chicago Division has a required rate of return of 15%. The weighted average cost of capital is 10%. Information for Chicago Divisions operations over the past 2 years follows.
-Which of the following is most likely to be an example of an agency cost caused by incongruent goals?

• A) Employee time working in a target costing team
• B) Loss on a special order because of unanticipated production problems
• C) Managers' time to negotiate a transfer price
• D) Decline in sales from a change in consumer preferences

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Definitions:

Absenteeism

The habitual non-presence of an employee at their job, which can be due to various reasons, including illness, personal issues, or dissatisfaction with the work environment.

Organizational Learning

Refers to the process by which an organization “learns” from past mistakes and adapts to its environment.

Organizational Pluralism

An approach within organizations that promotes diversity, inclusivity, and coexistence of multiple cultures, viewpoints, and practices.

Organizational Engineering

A field that applies engineering principles and analytical approaches to the design and optimization of organizational structures, processes, and systems for improved performance.