07_AdditionalStudyQuestions

07_AdditionalStudyQuestions - ACC 333 (Farrell) Class 07...

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ACC 333 (Farrell) Class 07 Fall 2011 Page 1 of 2 Additional Study Questions Decision Management and Control (continued) 1. The “Lemons Problem” is an example of what classic agency problem? How does the Lemon Problem relate to the situation faced by a venture capitalist considering an investment in an entrepreneurial, owner-managed company? Does it ever pay an agent to make expenditures to reduce agency costs? If so, describe and explain a specific example related either to the “Lemons Problem” or to the situation faced by the entrepreneur and venture capitalist. If not, explain why not. 2. Decision management and control review question. At Oak Hill Country Club, a private non-profit organization, the right to decide when the course is playable (i.e., when members are allowed to play) is assigned to the greenskeeper. The greenskeeper is a salaried employee (flat wage) whose primary responsibility is maintenance of the course and grounds. He is given a budget each year for that purpose. The Pro is the head professional, who operates the pro shop and gives lessons. The Pro receives a salary plus all net revenues from operation of the pro shop and from any lessons given. a)
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This note was uploaded on 03/19/2012 for the course ACCACC 333 taught by Professor Anne during the Fall '11 term at Miami University.

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07_AdditionalStudyQuestions - ACC 333 (Farrell) Class 07...

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