Which of the following would be best considered to be an agency conflict problem in the behavior of the following financial managers? A. Bill chooses to pursue a risky investment for the company's funds because his compensation will substantially rise if it succeeds. O B. Sue instructs her staff to skip safety inspections in one of the company's factories, knowing that it will likely fail the inspection and incur significant costs to fixC O C. Michael chooses to enhance his firm's reputation at some cost to its shareholders by sponsoring a team of athletes for the Olympics. D. James ignores an opportunity for his company to invest in a new drug to fight Alzheimer's disease, judging the drug's chances of succeeding as low. O O O O
Which of the following would be best considered to be an agency conflict problem in the behavior of the following financial managers? A. Bill chooses to pursue a risky investment for the company's funds because his compensation will substantially rise if it succeeds. O B. Sue instructs her staff to skip safety inspections in one of the company's factories, knowing that it will likely fail the inspection and incur significant costs to fixC O C. Michael chooses to enhance his firm's reputation at some cost to its shareholders by sponsoring a team of athletes for the Olympics. D. James ignores an opportunity for his company to invest in a new drug to fight Alzheimer's disease, judging the drug's chances of succeeding as low. O O O O
Chapter6: Business Expenses
Section: Chapter Questions
Problem 58P
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