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kvv77 [185]
3 years ago
7

Doug is the vice president of product development for a corporation that makes flavored honey. Doug proposes to the board that t

hey approve three new products: chili-flavored honey, seaweed-flavored honey, and black-licorice honey. Doug and his team have market tested the flavors, and they received positive reviews from focus groups. The board approves the flavors, which then fail miserably and cost the company thousands of dollars. If some shareholders sue the board for its decision to market the flavors, the board ___________.
Business
2 answers:
kogti [31]3 years ago
8 0

Answer:

most likely will not be held responsible because of the business judgment rule.

Explanation:

A business judgement rule is a legal provision that protects the board of a company from frivolous legal actions as flregards its business decisions.

Boards of companies are assumed to act in good faith, within their fiduciary standards of loyalty, prudence and care that the board owes to shareholders.

It will have to be proven that the board blatantly violated a code of conduct, otherwise the court will review or question it's decisions.

Gelneren [198K]3 years ago
4 0

Answer:

will not be held responsible for the loss.

Explanation:

The business judgement rule is a doctrine that affects corporation's management and other agents. This doctrine is based on the idea that all business decisions yield unknown results, even the safest investments or safest projects can go wrong. Only the US government has never defaulted on a loan (US securities) but every other nation or organization has at one point in time defaulted or delayed a payment.

Investors that buy stocks from a corporation know about the risks of running a business, if they do not like to take risks, US securities are always available. As long as management (including the board) acts on good faith, within the normal scope of business, they cannot be held liable for any bad investment carried out.

If this doctrine didn't exist, no one would be able to manage a company, since no one would dare to make any decisions at all. When you calculate the price of stock or the cost of capital, you must add the risk free rate (US securities) + the risk premium.

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Lynn Bernerd, Inc., manufactures and sells reclining furniture. The company currently operates in the United States but wishes t
xeze [42]

Answer:

E) Trading company

Explanation:

In international trade, trading companies are basically wholesalers that work at an international level. They usually purchase products from different businesses and then resell them to local retail businesses or sometimes final consumers (less common). Trading companies generally enter a exclusive distribution agreement with the manufacturer per region or country that they operate in.

3 0
3 years ago
If The Limited Company relies on hiring a foreign textile manufacturer to produce a
svetlana [45]

Answer: Contract manufacturing.

Explanation:

Contract manufacturing is the outsourcing of some production activities that were formerly done by the producer to a third party. An organization may outsource certain parts for a product.

Contract manufacturing is the practice of giving out part of a work to outside sources rather than completing all the work within the company. It results in lower expenses and costs.

4 0
3 years ago
Westerville Company reported the following results from last year’s operations:
Varvara68 [4.7K]

Answer:

Westerville Company

1. Last year's margin is:

= 20%

2. Last year's turnover is:

= $1,800,000

3. Last year's ROI is:

= 30%

4. The margin related to this year's investment opportunity is:

= 10%

5. The turnover related to this year's investment opportunity is:

= $360,000.

6. The ROI related to this year's investment opportunity is:

= 12%

7. The margin this year is:

= 18.33%

8. The turnover that it will earn this year is:

= $2,160,000

9. The ROI that it will earn this year is:

= 26.4%

Explanation:

a) Data and Calculations:

                                             Last Year's          This Year's          Total

Sales                                    $1,800,000           $360,000     $2,160,000

Variable expenses                  435,000              108,000          543,000

Contribution margin             1,365,000             252,000      $1,617,000

Fixed expenses                    1,005,000              216,000        1,221,000

Net operating income          $360,000             $36,000       $396,000

Average operating assets $1,200,000           $300,000    $1,500,000

Minimum Required Rate of Return = 10%

=                                             $120,000             $30,000       $150,000

1. Last year's margin = 20% ($360,000/$1,800,000) * 100

2. Last year's turnover = $1,800,000

3. Last year's ROI = 30% ($360,000/$1,200,000) * 100

4. The margin related to this year's investment opportunity is:

= 10% ($36,000/$360,000) * 100

5. The turnover related to this year's investment opportunity is $360,000.

6. The ROI related to this year's investment opportunity is:

12% ($36,000/$300,000)

7. The margin = 18.33% ($396,000/$2,160,000) * 100

8. The turnover that it will earn this year = $2,160,000

9. The ROI that it will earn this year = 26.4% ($396,000/$1,500,000) * 100

5 0
3 years ago
In which of the following forms of doing business does the death of one of the owners cause dissolution? a. nonprofit corporatio
LenKa [72]

Answer:

b. partnership

Explanation:

Partnership refers to a form of business wherein two or more individuals agree to carry out a business mutually agreeing to share profits and losses in agreed ratio as per the clauses specified in the partnership deed.

Also, upon retirement or death of a partner, the partnership firm gets dissolved and requires to be reconstituted again with necessary changes being carried out in clauses and specified profit sharing ratio in the partnership deed.

Another significant feature of partnership being, except for limited liability partnership, in all other forms of partnerships, the partners are exposed to unlimited risk.

5 0
3 years ago
What is always true at the quantity where a firm's average total cost equals average revenue?
Juli2301 [7.4K]
The firm is probably at its early stages of development, and is struggling to break even.
8 0
3 years ago
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