Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 1, Problem 12PS
Summary Introduction
To discuss: The principles that should guide the decision.
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Most managers have no difficulty avoiding blatantly dishonest actions. But sometimes there are gray areas, where it is debatable whether an action is unethical and unacceptable. Suggest an important ethical dilemma that companies may face. What principles should guide their decision?
What can be Consquences of Unethical Behaviour?
1. Why must a company’s managers understand the external environment?2. Why must managers relate to the external environment in a socially responsible manner? 3. Why must managers relate to the natural environment in an environmentally manner? 4. Why must managers relate to their external in an ethical manner?
What measures can a management accountant take if existing written policies do not give adequate direction on how to deal with an ethical dilemma in their organization?
Chapter 1 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 1.A - Prob. 1QCh. 1 - Investment and financing decisions Read the...Ch. 1 - Investment and financing decisions Which of the...Ch. 1 - Prob. 3PSCh. 1 - Prob. 4PSCh. 1 - Prob. 5PSCh. 1 - Opportunity cost of capital FH Corp. continues to...Ch. 1 - Corporate goals We can imagine the financial...Ch. 1 - Maximizing shareholder value Ms. Espinoza is...Ch. 1 - Prob. 9PS
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- Why might a moral person who is not viewed as a moral manager fail to establish an ethical culture in an organization?arrow_forwardEthics Codes help companies to keep a standardized way to take decisions else the decision can be biased. Unethical behaviors can damage the reputation of the company. Also if companies do not take strong measures against these then these can have a negative impact on others. The public or other stakeholders' interest can be subdued by personal interest. The impact of unethical behavior can have a long-term effect on any company's operation. Saint Leo's core values are Excellence, Community, Respect, Personal Development, Responsible Stewardship, and Integrity. Unethical behavior does not comply with any of it.arrow_forwardWhat are the benefits to a company of maintaining and encouraging high ethicalstandards?arrow_forward
- Unethical acts are generally committed by unethical people. What are some things companies can do to help ensure that their employees act ethically?arrow_forwardEmotional self-awareness refers to understanding your own feelings, what causes them, and how they impact your thoughts and actions. It is widely known that ethical dilemmas involving other employees/managers are inherently emotional. Researchers have found that such strong negative emotions as sadness and anger influenced individuals to make less ethical decisions, and that emotional intelligent individuals were able to make ethical decisions against the biasing influence of those negative emotions. Explain how moods could influence the thought process and ethical decision making. Have you made a decision you later regretted based on your emotional response?arrow_forward2. Which of the following is not a guideline of ethical conduct? a. Identify an ethical decision using your personal ethical standards of honesty and fairness. b. Identify the consequences of the decision and its effect on others. c. Make a decision that is in the best interests of the company; other parties affected are not important. d. None of these choices are correct.arrow_forward
- If a company is operating with ethical marketing behavior it: * changes customer feedback to be favorable for the company when unflattering does not disclose when mistakes have been made follows marketing practices that are fair and legal O All the Abovearrow_forwardIt has been said that recent graduates from a business school majoring in accounting and just entering the profession are especially vulnerable to ethical missteps because they are often naive and may not see the ethical aspects of situations they confront. Explain the various dimensions of such alleged ethical challenges in the workplace.arrow_forwardWhich is not an organization's response to risks? *a. An organization may accept the risk if it is prepared to absorb or mitigate the impact of the risk.b. An organization may take the risk but tries to lower the impact and possibility of occurrence of the risk.c. An organization may take the risk but not the returns that come with it.d. An organization may opt not to take the risk by avoiding the activity with associated risk.arrow_forward
- What steps should a management accountant take if established written policies provide insufficient guidance on how to handle an ethical conflict?arrow_forwardIdentifying ethical risks, A worker feels that fellow employees are not honest. Opportunity, pressure or rationalization?arrow_forwardIn the complex landscape of business decisions, the question of when to drop an unprofitable customer emerges as a strategic concern for many companies. In considering the decision of when to drop an unprofitable customer, what factors should a company weigh to strike a balance between short-term financial losses and long-term strategic gains? Reflect on the ethical implications of discontinuing a customer relationship and how it may impact the company's reputation. Additionally, discuss alternative approaches to managing unprofitable customers, such as implementing price adjustments, renegotiating terms, or offering additional value to enhance customer loyalty. How do different industries and business models influence the calculus of retaining or parting ways with unprofitable customers? In your opinion, when should unprofitable customers be dropped (if at all)? Provide personal examples, research and textbook integration to help support your arguments. In your opinion, when should…arrow_forward
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