One Means That Is Considered to Improve the Effectiveness of Outside

question 12

Multiple Choice

One means that is considered to improve the effectiveness of outside directors is

• A)mandating that all outside directors be drawn from government or academia rather than industry.
• B)requiring that outside directors be former executives of the firm.
• C)requiring outside directors to own significant equity stakes in the firm.
• D)requiring that outside directors be truly objective by having no ownership interest in the firm.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Accounts Payable

Liabilities or amounts owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Depreciation Expense

The portion of the cost of a fixed asset that is considered consumed during a specific accounting period, used to reflect wear and tear.

Accounts Receivable

Amounts due from customers to an enterprise for delivered but unpaid goods or services.