Identifying agency problems, costs, and resolutions Explain why each of the following situations is an agency problem and what costs to the firm might result from it. Suggest how the problem might be dealt with short of firing the individual(s) invoked. a. The front desk receptionist routinely takes an extra 20 minutes of lunch time to run personal errands. b. Division managers are padding cost estimates so as to show short-term efficiency gains when the costs come in lower than the estimates. c. The firm's chief executive officer has had secret talks with a competitor about the possibility of a merger in which she would become the CEO of the combined firms. d. A branch manager lays off experienced full-time employees and staffs customer service positions with part-time or temporary workers to lower employment costs and raise this year's branch profit. The manager's bonus is based on profitability. a. The front desk receptionist routinely takes an extra 20 minutes of lunch time to run personal errands. Which of the following statements correctly identifies the cost and possible solution for the agency problem in this case? (Choose all correct responses.) A. The front desk receptionist is being compensated for unproductive time. B. The company could install a time clock that would result in either (1) her returning on time or (2) reducing the cost to the firm. C. The management could bring the situation to the attention of the receptionist. The extra emphasis on meeting her duties may be all that is required. D. The company should do nothing. Any attempt to solve the problem would likely create an unhappy employee and only make the situation worse