It ensures the firm's ability to meet imminent liabilities as they arise.

Question $2$

Which of the following scenarios best highlights the concept of

agency costs in a complex partnership?

Concentrating decision$-$making authority with a single partner.

A general partner making investment decisions independently of the

limited partners.

Allocating resources to projects that benefit individual partners over

the firm as a whole.

Partners agreeing to share profits equally despite varying levels of

contribution.

A partnership agreement that allows each partner to unilaterally veto

major decisions.