Which of the following is not a characteristic of principal-agent conflicts that

Question

Which of the following is not a characteristic of principal-agent conflicts that often exist in a firm? O Firms can usually find solutions that reduce agency costs without increasing monitoring or incentive costs. Managers do not always operate in the best interest of owners because managers care about the noncash benefits of their jobs. O Managers generally have a shorter time horizon than owners; thus, managers do not fully take into account the future long-run profitability of the firm Save & Continue

Explanation / Answer

"A"

Firms can usually find solutions that reduce agency cost without increasing monitoring or incentive cost is not a characteristic of principle-agent conflict.

the conflict is all about the manager and the employee having different goals in the short term and long term. the other two options are correct.  

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