To Safeguard Against Kickback Schemes, Which of the Following Procedures

question 21

Multiple Choice

To safeguard against kickback schemes, which of the following procedures should an organization implement?

• A) Have an employee in the purchasing department review the organization's payment patterns on a quarterly basis.
• B) Establish a written policy specifying that employees cannot accept more than $500 annually in gifts from customers or suppliers.
• C) Prohibit employees from engaging in any transaction on behalf of the organization when they have an undisclosed personal interest in the transaction.
• D) All of the above

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Definitions:

Negative NPV

A condition where the net present value (NPV) of an investment is less than zero, implying that the investment’s costs outweigh its benefits.

Cost of Capital

The minimum return needed to justify investing in a capital budgeting endeavor, such as the construction of a new facility.

Cost of Capital

Signifies the expected rate of return that market participants demand in order to commit money to an investment, considering risk and potential gains.

IRR

Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of investments, indicating the annualized rate of return that sets the net present value of all cash flows (both positive and negative) from a particular project equal to zero.