Luke Is a Director of Motor Parts Corporation

question 21

Multiple Choice

Luke is a director of Motor Parts Corporation.Luke makes decisions with respect to Motor Parts in good faith,in what Luke believes is the firm's best interest,and without violating any duties owed to it.If,despite these circumstances,Luke exercises poor business judgment,under the business judgment rule Luke is

• A)immune from liability.
• B)liable only to the extent that Luke gains as a result.
• C)liable only to the extent that Motor Parts suffers as a result.
• D)wholly liable.

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Definitions:

Interest Rate

The percentage charged on a loan or paid on savings over a period of time, typically expressed annually.

Purchase Cost

Purchase Cost is the total expense incurred to acquire an asset or service, including the price paid and any additional charges necessary to put it into use.

Accrued Interest

Interest that has been incurred but not yet paid, often referring to the interest accruing on a bond between payment periods.

Sale Received

The funds collected from the sale of goods or services.