A firm’s value depends on the positive net income generated in the past. True False A firm’s value depends on the firm’s ability to generate positive cash flows now and in the future True False When determining the value of a firm, which of the following statements is true? • Inversters are risk neutral. Other things equal they prefer to pay more stocks that are less risky and have uncertain cash flows • Investers love risk. Other things equal they prefer to pay more for stocks that are more risky and have uncertain cash flows.
Bentham said ‘the principle of utility aims to promote happiness which is the supreme ethical value.’ In determining how to measure different amounts of pleasure and deciding on the right and good thing to do Bentham came up with the Hedonistic Calculus. This was a calculus to weigh up pain and pleasure and a way of testing whether an action is morally right, one that results in the most pleasurable outcome. It is measured in a quantitative way. Looking at the quantity of happiness produced from the action. It consists of seven key elements which measure different aspects of happiness.
The first 45 minutes will be used for the test and the remainder to discuss the correct answers. Mon., Jan. 30 – Stakeholder Framework as a Model for Ethical Decision Making Preparation: Read 3.1–3.5, 13.1–13.2, and 13.5–13.8. Read Case 3.2 and prepare answers to case questions 1–3. Group and individual write-ups will be collected. Reflection Questions: What types of stakeholders do companies have?
Which precedes the other? Explain your answer. Week 1 - Discussion Question 2 Are professional ethics concerned with actions, the result of actions, or both? Why Week 1 – Discussion Question 3 What are examples of classical theories of ethics being applied to the professional practice of counselors? Week 1 Assignments: Week 1 (Plagiarism Quiz) 30 MCQ’s, Fill in the Blank & True False BSHS 332 Week 1 summary Week 2 Week 2 - Discussion Question 1 How might critical legal decisions affect the practice of human service professionals today?
Based on that, Corporation B is desirable to Corporation A as it has a greater net present value. The Internal Rate of Return (IRR) is defined as the discount rate that equates the present value of the project’s free cash flows with the project’s initial cash outlay (Keown, A. J., Martin, J. D., & Petty, J. W. (2014). Based on the Internal Rate of Return rule, an investment is suitable if the Internal Rate of Return exceeds the required return, it should be rejected otherwise. Based on that, Corporation B is preferred over Corporation A since the former has a higher Internal Rate of Return. Examining the above, the Net Present Value and the Internal Rate of Return are closely related.
Scholars such as Friedman suggest that treating the economic responsibility as the most important responsibility of a business, is called a profit-maximising view, and “the social responsibility of a business is to increase its profits.” This kind of view states that a company should be operated on a profit-orientated basis, with its sole mission being to increase profits. This approach would seem to benefit stockholders, as well as stakeholders, as the stockholder is going to benefit from the profit made by the company and will gain something back from the company, however problems can occur when the businesses and companies do not balance their ethical responsibility, as they can therefore be perceived as greed and unable to balance their corporate social responsibility, and will cause a bad name for a business. So although the stockholder may also be gaining profit by doing this (what the company sees as doing the right thing) is not necessarily the right thing to do in terms of stakeholders. However, Friedman would argue that as long as the business is maximising its profit, that is the main point and so the loss of the stakeholders is less important. This argument can be deemed as weak as Friedman’s approach does not mean that stakeholders can be benefited alongside stockholders, and so disagrees with
If the IRR is less than the WACC, the project should be rejected, as it impoverishes the firm’s owners. If the IRR equals the WACC, it earns only normal profits (i.e., the owners’ opportunity costs) and accepting it is a matter of indifference. In this care the project’s IRR is 18.031 > 11.88%, therefore the IRR rule tells us the same as the NPV rule: this project will enrich the firm’s owners. We note in passing that in more advanced courses in finance you would learn about projects for which this rule cannot be used. Broadly speaking, they are projects whose cash flows changes sign more than once—e.g., from negative to positive to negative again.
Universalism is where people should uphold certain values, such honesty as well as other values that society needs in order to function correctly. Universal principles may be powerful and useful, however what people say, hope, or think they would do is often now what is actually done in the long run. Egoism is acceptable behavior which maximizes benefits for an individual “doing the right thing,’ the focus of moral philosophy is defined by egoism as “do the act that promotes the greatest good for oneself” (mhhe.com, Ethics and Corporate Responsibility). Utilitarianism, unlike egoism, seeks the greatest good for the greatest amount of people. Organizations seek the greats good for the largest amount of consumers they can supply to, increasing their need for product.
Liberals are probably the strongest advocates of democracy. Democracy solves a problem described by an old adage: "Power corrupts, and absolute power corrupts absolutely." When power or wealth concentrates too heavily in too few hands in society, democracy is useful for dispersing much of that power back to the people. In other words, when enough voters become discontented with the status quo, they vote to change it. Of course, those already in power bitterly resent this; that is why there is such a strong anti-democratic streak in wealthy conservatives and business owners.
Instead of agreeing to leave the economy in the hands of an enabling government, republicans feel for an economy jumpstarted and fueled by the wealthy. Instead of destroying the wealthy, republicans feel that placing more money in the hands of the rich instead of taking it from them will encourage spending nationwide. This will allow for more jobs through business growth, which allows for a decreasing poverty rate as people on welfare transition to being self-sufficient members of society. As common sense as this may stand many take aim against this “For America to get back on track we are probably going to cut that sort (The upper class tax breaks) and not give it to you, we are going to take things away from you on behalf of the common good (Hillary Clinton)”. Anti business and enabling irresponsibility, people oppose the undenying common sense of this idea.