3. Individual Problems 21-3 Which of the following is a characteristic of principal-agent conflicts that often exist in a firm? O Firms can usually find solutions that reduce agency costs without increasing monitoring or incentive costs. O Managers do not always operate in the best interest of owners because owners are generally more risk averse than managers. Managers do not always operate in the best interest of owners because managers care about the noncash benefits of their jobs.
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- The princple-agent model xan explain non profit maximization in firms. Which of the following describves this model well? a. Managers, the agents, act irrationally or with bounded rationality. b. Shareholders, then principals act irrationally or with bounded rationality. c. There is asymmetric information between the shareholders (principals) and managers (agends) in terms of the managers' actions. d. Principles, interested in revenue maximization, force managers, their agents, to maximize revenue and growth. e. None of the above.arning -Courses E 3.1.1 Study-Google Docs olic/activity/3001002/assessment 3.1.2 Quiz: How Organizations Succeed Questlon 1 of 10 Which of the following is a source of risk for businesses? O A. Dividend analyses that show lost earnings B. Government regulations that set minimum wages O C. Profit goals that are not realistic O D. Stakeholder interests that affect the community1. Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46. a. Build a spreadsheet model to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,500 copies?b. Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to assess the sensitivity of profit to demand.c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3,500 copies. d. Consider the following scenarios: Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Variable Cost/Book $6 $8 $12 $10 $11 Access Price $46 $50 $40 $50 $60 Demand 2,500 1,000 6,000 5,000 2,000 For each of these scenarios,…
- Which type of business accounts for the majority of sales revenue in the United States? Partnership Corporation Proprietorship Business structures in which ovwnership and management are separate, as with corporations, are subject to principal-agent problems. Which of the folloving may help reduce such problems and promote cost efficiency? Check all that apply. O Threat of a takeover O Loyal customers who will buy the firm's products unconditionally Profit-sharing agreements with managers32.23 Millie Bush has written a best-seller. Revenues net of production costs are $3007¹/34¹/3 where T is the number of publicity trips Millie takes and A is the number of ads for the book that appear. Millie has to pay for all of her own publicity trips, which cost $100 each. Her publisher pays for the advertising, which costs $100 per ad. Revenues from the book are split equally between Millie and her publisher. Let T1 be the number of trips that Millie would choose to make in a Nash equilibrium where she chooses the number of trips and the publisher chooses the amount of advertising. Let T2 be the number of trips that Millie should make if trips and advertising are determined so as to maximize total profits net of trip and ad costs. (a) T1 = 1 and 72 = 1. (b) T1 = 1 and 72 = 2. (c) T1 = 2 amd T2 = 1. (d) T1 = 1 and T2 = 1/8. (e) T1 1/8 and T2 = 1.11. Mary Kate Corporation allows Ashley Company to use Mary Kate's trademark as part of Ashley's domain name. This is most likely a. b. 14. a license agreement. a likelihood of consumer confusion. c. counterfeiting. d. trademark dilution. 12. The parties to a contract, rather than insist on full and absolute performance, may instead choose to discharge contractual duties through which of the following: a. rescission b. novation c. accord and satisfaction. d. 13. Bobby opens a donut shop that sells an innovative new kind of donut. Bobby decides he doesn't need to consult a lawyer and he calls the new donut "The Donut". Bobby extensively markets "The Donut", has a high sales volume and becomes well known for selling "The Donut". The term Donut, in Bobby's product name is automatically protected against trademark infringement. All of the above are correct. a. b. receives no protection against trademark infringement. C. can be registered as a trademark to obtain protection against…
- Antitrust enforcement is controversial mainlybecausea. cooperative domestic firms are best equipped todeal with international competitors.b. some business practices that seemanticompetitive may in fact have legitimatepurposes.c. excessive competition can drive some firms out ofbusiness, causing job losses.d. vigorous enforcement can reduce businessprofitability, lowering shareholder value.12. What characteristics of an organizational structure and culture are best suited to achieving a cost-leadership strategy? O a. formal, with managers incentivizing employee autonomy O b. formal, with managers having control over activities O c. informal, with managers promoting innovation O d. formal, with employees having control over activities e. informal, with managers having control over activities Clear my choice2 Fred and his employer both know that Fred can generate $200,000 of profit peryear for his company. After negotiations, they agree that he will earn $110,000 in annual compensation. What does this imply for the value of his outside or next best altermative?a. $0b. $5,000c. $IO,000d.$20,000
- Discuss the role of the full cost prising principle and profit maximization in modern economic trend? Also mention the role of single owner enterepreneur?2) In the Kansas City, MO-KS Metropolitan Area two important firms are in trouble: 1) a large agricultural firm that produces $100 million worth of products every year and employs 2000 workers and 2) a large hotel that produces $50 million of yearly sales and employs 3000 workers. The local government has funds to subsidize and prevent the closing of only one firm. Please,explai where you assess what are the effects of closing down these firms and give a policy recommendation to the major. (Note that you will need to use the table on page 55 in the Regional Multiplier ). Economic responsibility, carried to the extreme, is called the profit-maximizing view. The view argues that the corporation should be operated on a profit-oriented basis, with its sole mission to increase its profits so long as it stays within the rules of the game. Is the purely profit-maximizing view considered an adequate criterion of performance? Can it lead companies into trouble? Use examples