Define the following terms:
a. Incremental cash flow; sunk cost; opportunity cost; externality; cannibalization
b. Stand-alone risk; corporate (within-firm) risk; market (beta) risk
c. Risk-adjusted cost of capital
d. Sensitivity analysis; base-case NPV
e. Scenario analysis; base-case scenario; worst-case scenario; best-case scenario
f. Monte Carlo simulation
g. Replacement chain (common life) approach; equivalent annual annuity (EAA) method
Congress felt there was a need for additional investor protections against inaccurate information from companies.
In 2002, Congress passed this act to protect shareholders, employees and the public from accounting errors and fraudulent financial practices. There were 3 key provisions:
The Sarbanes-Oxley act, passed by Congress in 2002, is intended to improve the accuracy of information which is made public by both board members and shareholders of public companies.