【正文】 2020 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 25. The director is mistaken. The risk of the project is not determined by the borrowing rate from the bank. The opportunity cost of capital is the rate of return available from investments in the financial markets at the same level of risk as Quince’s averagerisk investments. Therefore, the opportunity cost of capital is also the minimum acceptable rate of return for a firm’s capital investments. The rate of return on the averagerisk investment project must be pared to the firm’s cost of capital in order to determine whether to move ahead with the project. Est time: 01–05 26. The opportunity cost of capital for this investment is the rate of return that investors can earn in the financial markets from safe investments, such as . Treasury securities. The best estimate of the opportunity cost of capital would rely on interest rates on . Treasuries with the same maturity as that of the proposed investment, ., 1year Treasury bills. Est time: 01–05 27. a. Since the government guarantees the payoff for the investment, the opportunity cost of capital is the rate of return on . Treasuries with 1 year to maturity (., 1year Treasury bills). b. Since the average rate of return from an investment in carbon is expected to be about 20%, this is the opportunity cost of capital for the investment under consideration by Pollution Busters, Inc. Purchase of the additional sequesters is not a worthwhile capital investment because the expected rate of return is 15% (., a $15,000 gain on a $100,000 investment), less than the opportunity cost of capital. Est time: 01–05 28. a. A fixed salary means that pensation is (at least in the short run) independent of the firm’s success. b. A salary linked to profits ties the employee’s pensation to this measure of the success of the firm. However, profits are not a wholly reliable way to measure the success of the firm. The text points out that profits are subject to differing accounting rules and reflect only the current year’s situation rather than the longrun prospects of the firm. Chapter 01 Goals and Governance of the Corporation 19 169。 2020 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9. A corporation might cut its labor force dramatically, which could reduce immediate expenses and increase profits in the short term. Over the long term, however, the firm might not be able to serve its customers properly, or it might alienate its remaining workers。 2020 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, di。 2020 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4. The individual stockholders of a corporation (., the owners) are legally distinct from the corporation itself, which is a separate legal entity. Consequently, the stockholders are not personally liable for the debts of the corporation。 2020 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Est time: 01–05 33. As the text notes, the first step in doing well is doing good by your customers. Businesses cannot prosper for long if they do not provide to their customers the products and services they desire. In addition, reputation effects often make it in the firm’s own interest to act ethically toward its business partners and employees since the firm’s ability to make deals and to hire skilled labor depends on its reputation for dealing fairly. In some circumstances, when firms have incentives to act in a manner inconsistent with the public interest, taxes or fees can align private and public interests. For example, taxes or fees charged on pollution make it more costly for firms to pollute, thereby affecting the firm’s decisions regarding activities that cause pollution. Other ―incentives‖ used by governments to align private interests with public interests include legislation providing for worker safety and product, or consumer, safety。 2020 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. b. The reduction in dividends, in order to allow increased reinvestment, can be consistent with maximization of current market value. If the firm has attractive investment opportunities, and wants to save the expenses associated with issuing new shares to the public, then it could make sense to reduce the dividend in order to free up capital for the additional investments. c. The corporate jet would have to generate benefits in excess of its costs in order to be considered stockprice enhancing. Such benefits might include time savings for executives and greater convenience and flexibility in travel. d. Although