Is this a potential agency conflict between Daniel and Ashley?

No; Daniel and Ashley are both authorized to spend ANBs money, so no conflict of interest can occur.

No; Since Daniel acknowledged that the car would not be used to support the business, no agency conflict can arise.

No; Daniel and Ashley co-own and co-manage ANB and have a partnership agreement that makes them equal, so an agency conflict cannot exist.

Yes; Daniel is misappropriating some of Ashleys wealth by unilaterally purchasing a nonbusiness asset using ANBs funds.

For the past 40 years, companies have attempted to attract, retain, and encourage managers by developing attractive compensation packages. These compensation packages have also been intended to reduce potential agency conflicts between these managers and the firms shareholders.

In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the value of the companys common stock price.

In addition to well-designed executive compensation packages, two other motivational forces can align the interests of managers with those of their shareholders. Which of the following actions could be used to reduce the potential for these agency conflicts and ensure that the firms managers will pursue the long-term wealth interests of their shareholders?

Let the manager know that a takeover is possible if he or she doesnt perform well.

Let the manager know that he or she will be fired if the compan