Consider the case of SPB Ltd., a solar panel and battery manufacturing company. You are the CEO of SPB. In producing solar panels and batteries, certain toxic chemical waste is generated and proper disposal is very expensive. A recently hired engineer has brought to you a project code named “Stealth Disposal” or SD for short. SD involves constructing underground chambers in which the toxic waste would be dumped. Since your company is in a remote location, it is unlikely that regulators will discover the unconventional disposal method. The engineer has designed a chamber to contain the hazardous waste underground and projects that there is less than a 25% chance that it will leak into ground water used for the drinking water of the nearest city. There is an up-front cost to constructing SD, but projected cost savings from using SD rather than normal disposal look very significant each year for the next 10 years–this could have an extremely positive impact on your performance bonus each year. After 10 years, the SD site would be full and other disposal methods would need to be considered. What considerations are important for your decision to accept SD or reject it? Consider how accepting this might affect you personally and how it might affect SPB. How might this tie into the principal-agent problem?