The following are agency problems associated with capital budgeting except:
I. reduced effort
II. perks or private benefits
III. empire building
IV. entrenching investments
V. avoiding risks
A) I, II and V only
B) I, II, and IV only
C) I, II, III and IV only
D) I, II, III, IV and V

Question

Quizplus · Accepted Answer

The agency problems associated with capital budgeting are reduced effort, perks or private benefits, empire building, entrenching investments, and avoiding risks. Therefore, option D is the correct answer as it includes all of the agency problems associated with capital budgeting.

The Following Are Agency Problems Associated with Capital Budgeting Except