According to Agency Theory, Which of the Following Is NOT

question 10

Multiple Choice

According to agency theory, which of the following is NOT a fundamental difference between owners and managers?

• A) Managers often have more information about the day-to-day business than do the owners.
• B) Owners are more inclined to accept risk, whereas managers tend to minimize risk-oriented behavior.
• C) Managers are more likely than owners to focus on a short time horizon.
• D) Managers are individualswho own most modernorganizations, whereas ownersactually run them on aday-to-day basis.
• E) Managers serve as agents who represent owners' interests.

Comprehend the significance of backlogs in company operations.

Classify long-term investments and their implications for a company.

Understand the structure and components of an income statement.

Recognize the importance and calculation of EBITDA.

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Definitions:

Robin Leidner

A sociologist known for her work on labor processes, service work, and the ways in which jobs are structured and experienced.

Rationalization

The process of offering a logical, reasonable explanation or justification for behaviors or decisions, often as a way of making them appear more acceptable or appropriate.

Efficient

Efficient describes achieving maximum productivity with minimum wasted effort or expense, often relating to the optimal use of resources to obtain a desired outcome.

Bureaucratic Organization

A structured administrative system governing any large institution, characterized by fixed rules, a hierarchy of authority, and a detailed division of labor.