Reference no: EM132159214

1. Scott, the president of Chalvam Enterprises, decided to relocate a manufacturing facility to Asia. He based his decision on the fact that moving the facility will cause the greatest good for the most people. Which approach to ethical decision-making did Scott use?

a. Legal positivism

b. Realism

c. Utilitarianism

d. Categorical imperative

2. The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors. MegaCorp, which has cumulative voting, quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure. The shareholders vote to do away with cumulative voting. The outsider, Dawn, who wanted to get herself elected to MegaCorp's board, claims that the company has committed an illegal act. Is she right?

a. No. Under the MBCA, regardless of MegaCorp's motives, it had the right to act as it did.

b. Yes. The United States Supreme Court has ruled that a publicly held corporation that purposefully sets about to eliminate cumulative voting to prevent a person from getting herself elected to the board has acted illegally

c. No, provided the company did not change its cumulative voting provision solely for the purpose of preventing a particular person from taking advantage of that right

d. Yes, but only if the company is incorporated in a state that has adopted the MBCA.

3. Charles owns 1,000 shares of stock in Temperan, Inc. Charles wants to obtain corporate records including the corporation's minute book and accounting records. Under the Model Act, Charles is entitled to this information if he requests it in good faith and:

a. he owns at least 1 percent of the company.

b. he has a proper purpose.

c. he is an employee of Temperan.

d. he is a controlling shareholder.

4. Sofia is an employee of Ambrose's Landscaping. While showing a customer how to use a hedge clipper, Sofia inadvertently cuts the customer on the arm, requiring a hospital trip and several stitches. With respect to Ambrose's Landscaping's liability for the incident:

a. Ambrose's Landscaping is not vicariously liable because Sofia was acting within the scope of employment.

b. Ambrose's Landscaping is vicariously liable because Sofia was acting within the scope of employment.   

c. Ambrose's Landscaping is not vicariously liable because it was an accident.

d. Ambrose's Landscaping is vicariously liable because Sofia was not acting within the scope of her employment.

5. Under the Model Business Corporation Act, who has the right to call a special meeting of the shareholders to vote on an emergency issue that cannot wait until the next annual meeting?

a. The board of directors and shareholders who own at least 10 percent of a company's stock

b. The board of directors and the CEO

c. Any group of shareholders that is at least 25 in number and holds 25 percent of a company's stock

d. Only the board of directors

6. Nikki was an tax accountant with HBR Accounting. Nikki decided to do some tax consulting in the evenings and on weekends. HBR is unaware of Nikki's consulting work. Which statement is correct?

a. Nikki has not breached a fiduciary duty to HBR since her consulting is done after her work for HBR

b. Nikki has not breached a fiduciary duty to HBR since her behavior does not reflect badly on the accounting firm.   

c. Nikki has breached a fiduciary duty to HBR since she is competing with HBR

d. Nikki has not breached a fiduciary duty to HBR since Nikki has a contractual relationship with her clients, not her employer

7. Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely be considered acting outside the scope of her employment if she:

a. ran over an attending at a gas station while re-fueling the truck.

b. crashed into a car at the airport while off duty.

c. hit a pedestrian in a parking lot during a working lunch.

d. smashed into a store-front while intoxicated while on duty.

8. Premier Enterprises sold Watson unregistered stock which was not exempt. The 1933 Act imposes liability on Premier, and Watson can demand rescission if he still owns the stock.

True

False

9. Lina was fired from Minnie's Mart because she was stealing from the cash register. A police report was filed. A prospective employer called Minnie's Mart for a reference and was told that Lina was fired for stealing. Minnie's Mart has defamed Lina.

True

False

10. Jonathon was a partner in a large firm. He died unexpectedly. His son, Frank, wanted to take over for his father in the partnership and was well qualified to do the work his father had done. Which statement best describes Frank's rights in the partnership if he inherits the interest?

a. Frank has a right to take over for his father in the partnership

b. Frank is entitled to the value in the partnership, but not to become a partner.

c. Frank has no rights to his father's partnership interest.

d. None of the above.