Quiz Ch 12 – Identifying Agency Problems in Capital Budgeting
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What combination of agency problems is linked with capital budgeting?
What combination of agency problems is linked with capital budgeting?
Which is NOT considered an agency problem in capital budgeting?
Which of the subsequent capital expenditures might be excluded from a firm’s capital budget?
Which is NOT an agency problem associated with capital budgeting?
What actions by managers serve as examples of overinvestment?
Who is/are the ultimate principal/s in the principal-agent framework?
Which are considered in a firm’s capital budget?
Who is involved in the process of monitoring?
True or false: Accounting income does not factor in the company’s cost of capital employed.
True or false: Challenges related to agency in capital budgeting involve decreased effort, perks, empire building, and entrenching investments.