The Rights of the Director of a Corporation Include a Right

question 102

Multiple Choice

The rights of the director of a corporation include a right to

• A)access the corporation's books, records, facilities, and other property.
• B)subordinate the corporation's welfare to his personal interest.
• C)use confidential corporate information for personal advantage.
• D)self-deal by taking advantage of an opportunity offered to the firm.

Comprehend the need for preparing pro forma statements on a stand-alone basis for proposed projects.

Acknowledge the effect of fixed and variable costs on operating cash flow.

Grasp the concept of net working capital management and its recovery in project analysis.

Appreciate the inclusion of opportunity costs in project cash flows.

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Definitions:

Favorable

A term used in accounting and finance to describe a situation or variance that results in a better-than-expected financial outcome.

Standard Cost System

A method of cost accounting in which predetermined costs are used for valuing inventory and recording operations, facilitating variance analysis.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of production, calculated before the period begins.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated to production, based on the actual hours worked.