Jim,an Attorney,allows a Statute of Limitations to Lapse on a Claim

question 2

Multiple Choice

Jim,an attorney,allows a statute of limitations to lapse on a claim by Midwest Manufacturing Company,a client.Jim

• A)can be held liable for malpractice.
• B)has violated an ethical standard but cannot be held liable.
• C)is subject to criminal penalties under the statute of limitations.
• D)will be automatically disbarred.

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Definitions:

Present Value

The value today of a sum of money or cash flows expected in the future, calculated with a certain rate of return.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Earnings Rate

The rate at which an individual or corporation is taxed or the speed at which an investment grows.

Present Value Index

A ratio used in capital budgeting to evaluate the profitability of investments by comparing the present value of future cash flows to the initial investment cost.