What Is the Primary Concern of a Board of Directors

question 22

Multiple Choice

What is the primary concern of a board of directors?

• A) To make decisions about how to run the day-to-day affairs of the business
• B) To monitor the decisions made by managers on behalf of the company
• C) To determine whether or not to pay dividends to stockholders
• D) To watch out for the interests of the employees
• E) To develop short-term goals for the company

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Definitions:

Break-even Point

The point at which total revenue equals total costs, resulting in no profit or loss for the business.

Break-even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and one has "broken even".

Margin of Safety

An accounting metric indicating how much sales can decline before a business reaches its breakeven point, measuring operational risk.

Volume of Sales

The total quantity of goods or services sold by a business within a specific time period, which can indicate the company's level of activity and market reach.