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

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Definitions:

Recurrent

Occurring repeatedly or periodically; characterized by a pattern of coming back or happening again after intervals of time.

Illness

A state of being in poor health, either physically or mentally, due to disease, injury, or other health conditions.

Catharsis Hypothesis

The theory that expressing or experiencing strong emotions leads to a reduction in emotional tension and a state of psychological relief.

Provokes

Stimulates or gives rise to a reaction or emotion, typically a negative one, in someone.