The following are agency problems associated with capital budgeting:
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

All listed items (I, II, III, IV, and V) are agency problems in capital budgeting, as they represent conflicts of interest between managers and shareholders, where managers may act in their own interest rather than maximizing shareholder value.

The Following Are Agency Problems Associated with Capital Budgeting