1. Suppose that you are a member of the board of directors for a large non-profit organization, and the board is required to draw up a constitution to govern it's activities . One of the things that the board is considering is lowering the threshold for passage of motions from two-thirds supermajority(..66.7%) to simply majority rule (..50.1%). Doing so will___ the agency costs and ___the decision making costs facing the board.

2. Suppose you are a development coordinator for a philanthropic organization and one of the organization's suppliers would like to contribute the proceeds from the future sale of painting to this year's centennial  fundraising campaign. The painting is set to be sold in five years to the museum for $10,000. You are allowed to count the present value of the future sale to this year's centennial fundraising campaign. Assuming that the annual rate will remain 6% over each of the next five years, this contribution adds about ___ to the campaign.

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PART 1 While lowering the requirement for motion passage from a twothirds supermajority to a simple majority rule the board will incur higher costs wh... View the full answer