With the Enactment of the Sarbanes-Oxley Act of 2002, All

question 21

Multiple Choice

With the enactment of the Sarbanes-Oxley Act of 2002, all public companies are now required by the SEC to disclose whether or not the company has:

• A)An audit committee.
• B)Human resources guidelines.
• C)A code of ethics.
• D)A management compensation plan.
• E)None of the above.

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Definitions:

Net Present Value (NPV)

The difference between an investment’s market value and its cost.

After-Tax Borrowing Rate

The interest rate on borrowed funds after accounting for the effect of income taxes.

Cost of Capital

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

Financial Lease

A lease agreement where the lessee effectively obtains all the risks and rewards of ownership without actually owning the asset.