Which of the Following Statements Is False

question 10

Multiple Choice

Which of the following statements is false?

• A) When a firm faces financial distress, shareholders have an incentive not to invest and to withdraw money from the firm if possible.
• B) Because top managers often hold shares in the firm and are hired and retained with the approval of the board of directors, which itself is elected by shareholders, managers will generally make decisions that increase the value of the firm's equity.
• C) An over-investment problem occurs when shareholders have an incentive to invest in risky positive-NPV projects.
• D) A negative-NPV project destroys value for the firm overall.

Explain the concept and importance of ethical values in managerial decision-making.

Understand various ethical views (utilitarian, individualism, justice) and their application in business scenarios.

Differentiate between instrumental and terminal values and their relevance to business ethics.

Identify the processes and benefits of a social responsibility audit.

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Definitions:

Sum-Of-The-Years-Digits

An accelerated method of depreciation which calculates annual depreciation by multiplying an asset's cost by a fraction that decreases year by year.

Scrap Value

The estimated residual value of an asset after it has reached the end of its useful life.

Transmitter

A device that sends signals, such as radio waves, from one location to another, typically used in communication systems.

Double-Declining-Balance

An accelerated depreciation method that doubles the rate at which an asset's book value is reduced compared to straight-line depreciation.