To minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consideration. Which of the following is a primary means for monitoring managerial behavior?1. stakeholder activism in which participants view themselves as shareholders2. a board of directors that acts in the best interests of shareholders to create long-term value3. a board of directors that acts in the best interests of shareholders to create short-term value
4. managerial incentives to align management interests with those of the board of directors

Costco wholesale corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 471 locations across the u.s. as well as in canada, mexico and puerto rico. as of its fiscal year-end 2005, costco had approximately 21.2 million members. selected fiscal-year information from the company's balance sheets follows. ($ millions). selected balance sheet data 2005 2004 merchandise inventories $4,015 $3,644 deferred membership income (liability) 501 454 (a) during fiscal 2005, costco collected $1,120 cash for membership fees. use the financial statement effectstemplate to record the cash collected for membership fees. (b) in 2005, costco recorded $46,347 million in merchandise costs (that is, cost of goods sold). record thistransaction in the financial statement effects template. (c) determine the value of merchandise that costco purchased during fiscal-year 2005. use the financial statementeffects template to record these merchandise purchases. assume all of costco's purchases are on credit.