Tim Donaghy Was a Referee for the NBA

question 54

Multiple Choice

Tim Donaghy was a referee for the NBA. Mr. Donaghy began betting in 2003 on NBA games. He also provided tips to other gamblers on who would win games in which he was serving as a referee. Mr. Donaghy's actions:

• A)were illegal under federal law, but not an ethical breach.
• B)were a conflict of interest.
• C)were not a breach of ethics because he used the money he made for a summer camp for underprivileged children.
• D)None of the above

---

Definitions:

Unit Variable Cost

The variable cost associated with producing one additional unit of product.

Net Operating Income

A company's revenue minus its direct and indirect operating expenses, excluding taxes and interest, reflecting the profitability of its core business activities.

Monthly Sales

The total revenue generated from the sale of goods or services within a month.

Margin of Safety

The extent to which sales levels can fall before reaching the break-even point, serving as a cushion against financial loss.