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Making decision based on profit maximsation focus on accounting income and may be manipulated as it tends to focus on the short term, it can therefore be regarded as too simplistic as it does not consider cash flows, is biased towards short run returns and ignores the relative riskiness of the alternative.

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โˆ™ 2008-04-03 06:46:16
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Q: What is meant by profit maximization?
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Related questions

What is meant by the principle of profit maximization?

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Profit maximization versus wealth maximization?

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What are the limitations and weaknesses in profit maximization?

what are the limitation and disadvantages of profit maximization


Advantages of profit maximization?

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Are wealth maximization and profit maximization related?

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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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Wealth maximization vs profit maximization?

wealth maximization is a stratigic target of the entity , while the profit maximizations is a tactical one . the profit maximization always concern with the operational plans .... and the wealth maximization always concern with top managements plans .


Goals of the firm?

profit maximization &wealth maximization of shareholders.


Can there be difference between profit maximization and shareholders wealth maximization?

the difference between profit maximization and shareholders wealth maximization is that profit maximization is concern with profit that a company received based on inflow and outflow within a period while shareholders wealth maximization is concern with dividend and capital gain that shareholder received on a return of his/her investment.


What are the disadvantages of profit maximization?

Profit maximization ignores the risk associated with the stream of cash flow with the product. Also, profits for different types of stakeholders can not be maintained with profit maximization.


What are the benefits of profit maximization?

The benefits of profit maximization include top performance from workers and more market share for the customers. When a company focuses on profit maximization, their shareholders are happy.


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.


What is the difference between profit maximization and value maximization?

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Sales maximization vs profit maximization?

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What do you mean by profit maximization?

profit maximization is the (short run) process by which a firm determines the price and output level that returns the greatest profit


What is profit maximization model?

Profit Maximization model means a scenario where the busniess is runned by the motive of profit making and keep the cost low.


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 policies on profit and maximization in manegerial economics?

WHAT IS THE PROFIT MAXIMISATION?


What is the difference between profit maximization and wealth maximization?

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Why is shareholder wealth maximization a more appropriate goal than profit maximization?

Wealth maximization: To stay invested and multiply your invested money. The term is used for long-term investors. Short-term investors work for profit maximization. They sell their shares, as and when they get profit from the market.


In what ways is the shareholder's wealth maximization objective superior to the profit maximization objective?

Profit maximization is short term as compare to share holder's wealth maximization, Managers should focus on Share holder's wealth maximization because its what they are hired for. also there are sevseal reasons such as.... 1) the share holders wealth is be considered.. 2)profit maximization doesnt say which type of profit it should maximize-short term or long term 3)profit maximization ignores the social values but only aims at earning maximum profit. 4)wealth maximization also considers improving the goodwill of the organization


Maximization of shareholder wealth as a goal is superior to profit maximization because?

it is operating cost


Why is profit maximization unethical?

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