A Corporate Director May Not

question 56

Multiple Choice

A corporate director may not

• A)act in accord with his or her own knowledge and training.
• B)use prudent business judgment in the conduct of corporate affairs.
• C)delegate work to corporate officers.
• D)engage in self-dealing.

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Definitions:

Net Present Value

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Postaudit

The process of reviewing and analyzing the outcomes of a project or investment after its completion to determine if expected results were achieved.

Cost of Capital

Represents the rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Capital Rationing

The process of selecting profitable projects under the constraint of limited available investment funds.