Which One of the Following Statements Is TRUE

question 16

Multiple Choice

Which one of the following statements is TRUE?

• A) personal use of the corporate jet is an example of a nonpecuniary benefit.
• B) a supplier substituting a lower-quality raw material without approval is an example of asset switching.
• C) an agency problem occurs when an owner/manager sells stock to an outside investor and the owner/manager fears the outside investor will consume too many perquisites.
• D) an agency conflict between inside owners/managers and outside owners occurs when the outside owners sell their shares to someone else.
• E) a quarter-end bonus is an example of a nonpecuniary benefit.

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Definitions:

Conscientious

Refers to a personality trait characterized by being diligent, careful, thorough, organized, and responsible in one's work or personal affairs.

Employees

Individuals who are hired by a business or organization to perform specific duties in exchange for compensation.

Contrasted

Highlighting the differences or distinctions between two or more items or concepts.

Power Differentials

The varying levels of influence or control between individuals or groups within a given context, often affecting interactions and outcomes.