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What are the advantages and disadvantages of profit maximization?
Wiki User
∙ 6y ago
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.
Wiki User
∙ 6y ago
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Under what conditions might profit maximization not lead to stock price maximization?
Under what conditions might profit maximization not lead to stock price maximization?"
What are the examples of profit maximization and maximization of shareholders profit?
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Sales maximization vs profit maximization?
sales maximization technique is generally used in scale industries where base of the expenses is largelly fixed and where variable costs are limited. on the other hand profit maximization technique are used by variety of industries. total output is higher in sales maximization as compared to profit maximization
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.
Is wealth maximization superior to profit?
yes
Advantages of profit maximization?
Profit maximization increase the graph of outputs.
Under what conditions might profit maximization not lead to stock price maximization?
Under what conditions might profit maximization not lead to stock price maximization?"
Are wealth maximization and profit maximization related?
Not necessarily
What are the examples of profit maximization and maximization of shareholders profit?
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What are some shortcomings of the goal of profit maximization?
Profit maximization includes some shortcomings like it ignores the risk that corresponds to the project's stream of cash flow. The timing of returns are ignored with this objective and it does not have as much relevance to a monopoly firm.
Is profit maximization is good or bad for society?
Profit maximization can be both good or bad. Done correctly, profit maximization helps the company provide great products and services for customers.
Sales maximization vs profit maximization?
sales maximization technique is generally used in scale industries where base of the expenses is largelly fixed and where variable costs are limited. on the other hand profit maximization technique are used by variety of industries. total output is higher in sales maximization as compared to profit maximization
What is the difference between profit maximization and value maximization?
discount rate
Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization because?
Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization
What are the advantages and disadvantages of a free economy?
Advantages: Competition > profit > innovation. Disadvantages: higher costs for consumers there are losers risk for an entrepreneur
What are the policies on profit and maximization in manegerial economics?
WHAT IS THE PROFIT MAXIMISATION?
Differentiate between value for money and profit maximization concept in corporate governance?
differentiate between value for money and profit maximization
