Conflicts of Interest Are an Ethical Problem for a Business

question 5

Multiple Choice

Conflicts of interest are an ethical problem for a business because they _________ .

• A)violate an individual's right to privacy
• B)create profits that would be owed to other companies instead
• C)create incentive for company representatives to act against others' best interest
• D)prevent the company from succeeding as well as it might otherwise

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Definitions:

Loan Principal

The original sum of money borrowed in a loan agreement, excluding interest, that must be repaid or serviced.

Interest

Interest is the cost paid for borrowing money, typically expressed as an annual percentage of the principal amount, distinct from interest charged to specific loans.

IFRS

International Financial Reporting Standards, which are global accounting standards for preparing financial statements.

Liquidity

A measure of a company's or individual's ability to meet short-term obligations, often associated with the ease of converting assets into cash.