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The Board of Directors of the Four Forks Generating Corporation

question 33

Multiple Choice

The board of directors of the Four Forks Generating Corporation is meeting to consider the construction of a new electrical generation facility near the Four Forks River. Director Appleton prefers a coal-burning plant because it promises to be the most profitable alternative. Over the short term at least, a coal plant will be by far the least expensive facility to build and operate. Coal is cheap and the considerable pollution from the plant won't affect anything within hundreds of miles from the plant.

Director Estrella wants a nuclear plant to be located 30 miles upriver from the biggest city in the area. Nuclear power is cleaner than coal. Completely safeguarding the community against accidents in the plant or the disposal of toxic waste could be very expensive. However, Estrella has discovered that the job can be done much more cheaply by cutting some corners–while still strictly following all laws–and creating some additional risk for the community.

Director Jossleman supports the most expensive option of the three–she wants a wind farm to be built along the banks of the river on top of a ridge. The wind turbines produce absolutely no pollution and pose no threat to the community or the environment. They are expensive to build and to operate at the current time because they require elaborate back-up systems to function when the wind isn't blowing.

-Director Jossleman is exhibiting which of the following social responsibility views?

Definitions:

Npvgo

Net Present Value of Growth Opportunities; an approach used to evaluate the value of investment projects or strategies based on their future growth possibilities.

Rate Of Return

A measure of the profitability or potential profitability of an investment, expressed as a percentage of the original investment.

Annual Dividend

Annual Dividend is the total dividend payment a shareholder receives from a company over a one-year period, often paid quarterly.