Suppose Bob owns two factories that are located several hundred miles apart. Bob decides to manage one of the plants himself, and he hires another person to manage the second plant. For purposes of operating the second plant, who is the agent and who is principal?

A) Bob is the agent and the manager is the principal.
B) Bob is the principal and the manager is Bob's agent.
C) Both Bob and the manager are principals.
D) We need more information to determine the identities of the principal and the agent in this case.

Question

Halefom Berhe · Accepted Answer

Final Answer : B, Explanation :  Bob is the one who owns the factories and is therefore the principal. The manager he hired is acting on behalf of Bob's interests and is therefore the agent.

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