FINANCIAL MANAGEMENT
16th Edition
ISBN: 9781337902601
Author: Brigham
Publisher: CENGAGE L
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Question
Chapter 13, Problem 2MC
Summary Introduction
Case summary:
The product is a software platform that incorporates a wide variety of media devices, including laptops, desktops, digital video recorders, and cell phones. Suppose you decide to start a company (like person S and person M). With these issues in mind, it needed to answer the following questions for potential investors. Once it has set up your business and set up procedures to run it, the plan to expand and ultimately go nationally to other colleges in the region. The main audience is the university's student body.
To determine: If person X expanded and hired additional people to help him, might that give rise to agency problems.
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If you expanded and hired additional people tohelp you, might that give rise to agency problems?
. What is an agency relationship? When you firstbegin operations, assuming you are the onlyemployee and only your money is invested in thebusiness, would any agency conflicts exist? Explainyour answer.
Discuss some of the agency problems your client might encounter
and explain how such agency problems can be resolved.
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