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Asked in Business & Finance
What are the difference between value maximation and profit maximation?
Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective. ...
Asked in Business & Finance
Profit maximization vsealth maximization in financial management of an organization?
Profit maximization is also about increasing the EPS (earning per share) of the shareholders and to maximise the net present worth. Main objective of co is profit maximization EPS: net profit/ no of shares outstanding. Wealth maximization is anything having value. Anything which can be expressed in money value or economic value which is considered as wealth. Baisc objective of a co is wealth maximization. How to increase the wealth: By producing a quality product at a competitive rate. By giving product at reasonable...
Asked in Economics
What are the criticism of profit maximization?
In profit maximization, the ultimate aim of the business is profit. When profit is the main target, focus on other factors like investment, expansion, usage of the product, creating goodwill, ethics, etc., are lost or given minimum priority. ...
What are the advantages and disadvantages of profit maximization?
The advantages of profit maximization is that creates a cash flow and investors become interested in companies that are maximizing their profits. The main disadvantage of it is that there are risks for business owners involved. An advantage of profit maximization is that it could create a huge increase in cash flow as long as the market remains good. However, a disadvantage is that if the market collapses during a period of profit maximization the business could lose everything. ...
Profit maximization basic objective of firm?
A firm's main objective should be to make decisions that maximize the value of the company for its owners, and as the owners of a company are its shareholders, the main financial objective should be 'the maximization of shareholder wealth'. Since shareholders receive their wealth through dividends and capital gains, shareholder wealth will be maximized by maximizing the value of dividends and capital gains that shareholders receive over time. Problems with the 'maximization of profits' objective: Firstly, there are quantitative difficulties associated with profit. Maximization...
Asked in 2008 Federal Bailout, Business & Finance
Why Profit Maximisation is the main objective of a firm Discuss this statement with the help of an example?
1. Profit Maximisation is the main objective of a firm" Discuss this statement with the help of an example. ...
Why is wealth maximization a better operating goal than profit maximization?
Everyone knows that profit is the life blood of every organization. Profit maximization is the primary or main objective of organizations, but under the method of profit maximization the purpose is to increase sales and profit. Less importance is given for consumer interest. Any queries against product or services is not considered and importance will be less per this method. So at the beginning organizations may be successful in its goal of earning high profits, but the organization will definitely suffer loss in...
Asked in Business and Industry
The main goal of the business?
The main and primary goal of the business no matter what kind of nature it has, is only profit maximization. There may also be some secondary purposes such as well being of people or offering services to the society but the primary focus is PROFIT. http://www.aidandtrade.com/ ...
Why the main objective of a firm is to maximize profit?
Because they need money to stay at float and be able to compete with other companies. ...
Advantages of multinational companies for India?
With arrival of mncs in India, the basic infrastructure will have a sea change to which the whole country will be immensely benefitted. The customers will get quality products even at cheaper price. Thought the main objective of the mncs is profit maximization, their presence will be greeted with applause. With bue back arrangement, they can also help to bring in foreign exchange for the country. ...
Asked in Business & Finance, Business Finance
Why is earning profit considered as only one of the objective of business?
Earning money is a businesses main objective because it has investors that expect a return on their money. When businesses don't make money they stop existing. ...
Asked in Battle of Gettysburg
What was the main objective of the battle of Gettysburg?
The main objective for General Lee, was to destroy the Union Forces. The main objective for General Mead, was to beat Lee back into Virginia. ...
Asked in Economics
Is it true or false that the objective of a firm is to maximize total revenue?
Generally speaking, the main objective of a firm is profit maximisation. This is not always the case, however, as some firms have different goals, including providing charitable services, satisficing, and providing a high quality good or service. Revenue (income) increases profit, while expenses decrease profit. Therefore, if a firm's revenue increases more than their expenses increase, they will generate a greater profit. ...