Describe the philosophy of noted economist, Milton Friedman, on the issue of "free market ethics."
Friedman held that it is wrong for managers to use corporate resources to deal with problems in society at large. Decisions regarding such social problems should be addressed by governments in the political arena and funded by tax dollars. A decision by corporate managers to aid society is, in effect, theft of stockholders' resources.
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Discuss why adherence by the accounting profession to a single, GAAP-based view is inappropriate
Actions that would NOT help to rectify a company's unethical and greed-driven culture encompass
A. promoting individuals who have stepped forward to spearhead the shift to a different culture and who can serve as role models for the desired cultural behavior. B. hiring frontline employees who display high-performance behaviors and a passion for making the company successful. C. requiring all company personnel to attend culture-training programs to better understand the new culture-related actions and behaviors that are expected. D. dismissing executives that exude an "ends-justify-the-means" mentality in pursuing overambitious operating and financial targets. E. adopting accounting principles that make the company's financial performance appear better than it really is.
Which of the following methods involves calculating an average beta for comparable firms and using that beta to determine a project's beta?
A. Risk premium method B. Pure play method C. Accounting beta method D. CAPM method E. Discounted cash flow model
Which of the following situations would be covered by the liability section of an unendorsed PAP if the insured is legally liable?
A) The insured injures a pedestrian while operating a friend's new motorcycle. B) The insured backs into and damages the garage door of his rented house. C) The insured intentionally runs into another motorist's car after the driver cut in front of him. D) The insured damages a parked car while driving a dump truck for his employer.