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:

Units-of-production Method

a depreciation technique that allocates the cost of an asset over its useful life based on the number of units it produces.

Straight-line Method

A method of calculating depreciation of an asset, which spreads the cost evenly over its useful life.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life.