What Are Agency Costs

question 19

Multiple Choice

What are agency costs?

• A)Costs of the sales force
• B)Costs associated with slack effort and with the administrative controls to deter it
• C)Costs related to general and administrative expenses
• D)Costs associated with outsourcing of firm functions
• E)Costs attributed to the use of professional service firms

---

Definitions:

Monthly Net Operating Income

The profit a business makes after paying for all operating expenses but before interest and taxes within a month.

Organic Fertilizer

A natural substance used to enrich the soil with nutrients, derived from plant or animal matter without synthetic additives.

Sales Commissions

Payments made to sales employees or agents, typically calculated as a percentage of the sales they generate.

Net Operating Income

A financial metric that represents the total earnings generated from a company's operations, excluding non-operating income and expenses like interest and taxes.