An Example of a Direct Agency Cost Is

question 33

Multiple Choice

An example of a direct agency cost is:

• A) a manager turning down a value-contributing project because of its risks.
• B) a manager expensing a large dinner on the company expense report.
• C) a manager using too little debt within the company's capital structure because of the additional risk associated with debt.
• D) all of the above.

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Definitions:

Gestalt Concept

A principle in psychology that describes the human ability to perceive patterns or wholes in complex visual inputs instead of merely additive sensory inputs.

Closure

A psychological phenomenon where the mind seeks to perceive a complete image or idea even when certain components are missing or incomplete.

Kinesthetic

Relates to the perception of body position and movement, often referred to as muscle sense.

Vestibular Senses

The sensory system that contributes to balance and spatial orientation by detecting changes in motion and gravitational pull.