According to David Vogel, Which of the Following Should a Firm

question 23

Multiple Choice

According to David Vogel, which of the following should a firm be most cautious about when engaging in CSR activities?

• A)Investing in CSR when consumers are not willing to pay higher prices to support that investment.
• B)Employees may become over-indulgent in activities related to social causes.
• C)Attrition levels may rise due to indifference among employees engaging in activities related to social responsibility.
• D)The easily measurable ethical pay off can turn out to be lower than the anticipated levels.

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Definitions:

Retained Earnings

The portion of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt.

Cost Method

An accounting method used for recording investments, where the investment is recorded at purchase cost without subsequent change for market value fluctuations.

SPE

A Special Purpose Entity is a legal entity created by a firm specifically to isolate financial risk, typically for securitization or financing projects.

Primary Beneficiary

The main individual or entity intended to receive the benefits from a trust, insurance policy, or other fiduciary arrangement.