Under the Business Judgment Rule,corporate Managers

question 72

Multiple Choice

Under the business judgment rule,corporate managers:

• A)must not make uninformed decisions.
• B)may have conflicts of interest.
• C)are not required to make reasonable investigations.
• D)may not benefit even as shareholders.

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Definitions:

Cash Savings

Funds that are kept on hand or in a savings account for future needs, emergencies, or investment opportunities.

Investment Opportunities

Potential placements of capital in projects or assets that are expected to yield returns or financial growth over time.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in other cases, the central bank's interest rate for banks.

Net Present Value

The contrast between the present-valued cash inflows and outflows over a determined period.