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arsen [322]
4 years ago
11

An appraiser valued a subsidiary of Signal Co. at between $230 million and $260 million. One month later, Burmah Oil offered to

buy the subsidiary at $480 million, giving Signal only three days to respond. The board of directors accepted the offer without obtaining an updated valuation of the subsidiary or determining if other companies would offer a higher price. Members of the board were sophisticated, with a great deal of experience in the oil industry. A Signal Co. shareholder sued to prevent the sale. Is the Signal board protected by the business judgment rule?
Business
1 answer:
Goshia [24]4 years ago
8 0

Answer:

No, because they violated the duty of care

Explanation:

Business judgement rule is a provision that protects the management of a business from frivolous legal action concerning the way it does business.

The court assumes that the management acts in good faith in its fiduciary role, standard of loyalty, prudence, and care.

Duty of care is breached when the management do not make reasonable effort to prevent injury or loss.

In this instance Signal board is not protected by the business judgement rule because they violated duty of care.

Although the offer by Burmah oil is above the valuation a month ago, the board did not bother to do a present valuation or find out if other companies want to buy the subsidiary at a higher price.

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Sommer Corporation began the year with cash of $130,000 and land that $55,000. During the year Sommer earned service revenue of
kirza4 [7]

Answer:

How much net income (or net loss) did Sommer experience for the year?

$11000

Explanation:

earning                  280000

Expenses salaries  159000

Expenses rent           85000

Expenses Utilities   25000

Net Income             11000

4 0
3 years ago
List the four ways to become a business owner.
dsp73

Answer:

1. Start your own business;

2.Take over a family-owned business.

3. Buy a franchise.

4. Buy an existing operating business.

3 0
4 years ago
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Which best explains why the law of supply operates the way it does in a free enterprise economy?
postnew [5]

Answer:

D: Companies want to be as profitable as possible.

Explanation:

On quizlet.

6 0
3 years ago
In one hour. Sue can produce 70 caps or 21 jackets and Tessa can produce 50 caps or 25 jackets. Sue's opportunity cost of produc
Marina CMI [18]

Answer:

both Sue and Tessa gain 0.3; 0.50

Explanation:

Sue's production possibilities frontier:

  • 70 caps
  • 21 jackets

Sue's opportunity cost:

  • opportunity cost of producing caps = 21 / 70 = 0.3 jackets
  • opportunity cost of producing jackets = 70/21 = 3.33 caps

Tessa's production possibilities frontier:

  • 50 caps
  • 25 jackets

Tessa's opportunity cost:

  • opportunity cost of producing caps = 25 / 50 = 0.5 jackets
  • opportunity cost of producing jackets = 50/25 = 2 caps

Sue should produce caps and Tessa jackets:

total production = 70 caps (Sue) + 25 jackets (Tessa), if they trade they will both win because each specialized in producing the good in which they have a comparative advantage (lower opportunity costs). If Sue traded and received 21 jackets, she would still have 28 caps left. If Tessa traded and received 50 caps, she would still have 10 jackets left.

6 0
4 years ago
Luigi's Pizzeria is considering to hire two more workers, Jessie and Kathy. Suppose that the market wage for another worker is $
Irina18 [472]

Answer:

D) Luigi should hire both workers as long as their marginal products do not change.

Explanation:

As long as the employees' marginal revenue product equals or exceeds their marginal cost, they should be hired.

Marginal revenue product = marginal physical output x price per unit

The marginal cost for hiring both Jessie and Kathy is $80.

Jessie's marginal revenue product = 10 pizzas x $9 per pizza = $90 > $80

Kathy's marginal revenue product = 9 pizzas x $9 per pizza = $81 > $80

5 0
3 years ago
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