Carter and the other shareholders will lose their investment and shares if Extreme Trax goes bankrupt.
Clarification:
In the event of a company's bankruptcy, creditors are paid first. Stockholders possess shares in the company, thus they assume the highest risk. If there's no remaining funds after creditor payments, stockholders will forfeit their investments.
Complete Question:
James Stilton serves as the CEO of RightLiving, Inc., a corporation that purchases life insurance policies at a reduced price from terminally ill individuals and sells them to investors. RightLiving compensates terminally ill patients with a percentage of the future death benefits (typically 65%) and subsequently sells the policies to investors for 85% of the future benefit amount. The patients receive funds to assist with their medical and other expenses, while the investors are assured a positive return on their investments. The difference between the purchase and retail prices represents RightLiving's profit.
Stilton is aware that some sick patients might acquire insurance policies through deceit (by concealing their illness on the application). If an insurance company uncovers such fraud, it will annul the policy and withhold payment. While Stilton is confident that most of the policies he has acquired are legitimate, he recognizes that a few may not be.
Requirement:
What additional ethical dilemmas might Stilton encounter?
Answer with Explanation:
Stilton's ethical challenges include:
- Should he disclose potential fraud to investors prior to executing sales?
- What policies should be established to ensure that legitimate individuals can easily sell their policies, and how would lack of such policies be unfair for RightLiving, Inc.?
- Stilton also faces ethical issues because the business model benefits from the early deaths of clients, which raises moral questions.
Depreciation refers to the reduction in an asset's value over time due to wear and tear. Calculating depreciation using the straight-line method results in $38,960 written off annually. This yields a depreciation rate of 16.34% per year. In comparison, using the double declining method results in a depreciation rate of 32.68% annually, with the first year's depreciation amount being $77,909.
Answer:
d. pertains to a firm's distinctive methods for creating additional value.
Explanation:
Competitive advantage refers to the edge a company has over its rivals. This can be achieved through various means such as providing value products, optimal quality, and excellent services that may entice customers away from competitors to their advantage.
The goal is to generate added value for the company's offerings, utilizing innovative concepts to attract customers and enhance satisfaction, ultimately leading to the fulfillment of corporate objectives.
Response:
The espoused values.
Clarification:
The espoused value refers to the beliefs articulated on behalf of the organization. For instance, these are the established practices and processes endorsed by employees, which yield positive outcomes and value for the company.
Hence, when an organization conducts an award ceremony to honor exemplary employees of the year, it reflects and promotes within the organizational culture the commitment to ethical behavior and corporate principles that are essential for maintaining and enhancing positive standards of conduct for achieving success in the organization.
