Which of the following is NOT an example of an agency cost?
A)Paying an accounting firm to audit your financial statements
B)Paying an insurance company to assure that building codes have been met for new construction
C)Paying a landscaping firm to maintain your firm's grounds
D)All of the above are agency costs.

Question

Quizplus · Accepted Answer

Agency costs are expenses incurred to ensure that agents (like managers) act in the best interest of principals (like shareholders). Paying a landscaping firm is a regular business expense, not an agency cost.

Which of the Following Is NOT an Example of an Agency