Final answer:
The major elements of a management agreement encompass both incentive fees or penalties related to operational performance and the level of control the owner has over management personnel, which means the correct answer is all of the above.
Step-by-step explanation:
The major elements of management agreements often include both incentives and penalties related to operating performance, as well as the degree of control the owner retains over the selection or removal of management personnel.
This means that the correct answer to the question is c) All of the above. Management agreements are critical because they define how a business is run and who has the authority to make key decisions.
For example, owners of property or businesses need to understand the costs and benefits of their investments and how management agreements can affect their profit margins through incentive fees or penalties.
Additionally, such documents often outline the expectations for financial institutions that facilitate business operations, such as providing loans or managing accounts.
Furthermore, management agreements may be influenced by governmental restrictions and have to comply with local zoning regulations, which determine what activities can be conducted on the property, whether it's for residential, commercial, or industrial use.