1.Agency costs refer to

a.

the costs associated with managing the demands of federal agencies.

b. the costs that arise due to conflicts of interest between shareholders and managers.

c. none of the above.

d. the costs involved when converting an entity from a proprietorship to a corporation.

2.

What is the proper goal for management of a firm?

a. Maximize net income or earnings

b. Maximize sales revenue

c. Minimize expenses

d. Maximize shareholder wealth