Short-Termism in a Company Can Be Avoided

question 32

Multiple Choice

Short-termism in a company can be avoided:

• A) if the company focuses on shareholders, not stakeholders.
• B) by promoting an understanding that sustainable activities might be good for profits.
• C) by asking the board of directors to focus on immediate pay-offs on investments.
• D) if the company seeks investments solely from analysts on Wall Street.

---

Definitions:

Independent Project

A project that can be pursued without affecting the acceptance or funding of other projects, allowing for standalone consideration in decision-making.

Net Present Value

The contrast in the present value of money received and the present value of money spent over a designated duration, applied in capital budgeting to appraise the profitability of a potential investment.

Cash Inflows

Refers to the money received by a business from its various activities, including sales, investments, financing, etc.

Initial Cost

The upfront expenditure required to purchase an asset or to start a project, including setup or installation fees.