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Which is more comprehensive objective profit maximization or shareholder wealth maximization?
If the company is public listed (trades in the stock market) their aim is shareholder wealth maximization whereas for a privately owned firm a profit maximization objective is appropriate.
What is 'value of a firm'?
The 'value of a firm' is connected with profit maximization. It is the present value of the firm's current profit and the future profit. It determines the value accurately.
Among the multiplicity of objectives that a modern firm has profit maximization continues to be the most important Comment?
The success or failure of a firm is measured in terms of the amount of profit it is able to earn in a competitive market. Under profit management, one has to study various theories of profit, emergence of profit, functions of profit and its measurement, etc.Thoeries underlying the Objective of a Firm, mainly talk about the subject of Ethics in Business. Debate is going on since a long time, as to whether every Firm's Objective needs to be ETHICAL? the answer may seem as simple as "YES", but the counter arguements that follow are difficult to answer.Coming to Profit Maximization, the question goes as to whether Profit Maximization Goal is justitfied? In a private enterprise, no one can have control over Profit maximization. If the profits are made with the use of Society's resources, such profits need to be sowed back for Societal Development.The profit-maximization rule applies both to firms that are able to sell their product at a constant price and to firms that find they must reduce the price of their product to increase sales. In the real world, firms have to engage in trial-and-error discovery processes, searching for the profit-maximization point. But the process can be succinctly described by the marginal revenue-marginal cost rule.Profit is what is left over from a business after the bills are paid. without profit the company can not afford to re-invest in capital or have money to pay stockholders. I think Customer satisfaction if the basic motive and objective of firm. When we will more and more consider to satisfy customer needs and wants, automatically our secondary objective "profit maximization" will be achieved.
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.
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.
Which is more comprehensive objective profit maximization or shareholder wealth maximization?
If the company is public listed (trades in the stock market) their aim is shareholder wealth maximization whereas for a privately owned firm a profit maximization objective is appropriate.
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.
Why profit maximization is not regarded as the core financial objective of firm?
Profit Maximization is a short term objective as all it aims for is to generate a higher revenue for the period.This objective is generally followed if the firm is highly leveraged and a higher profit is required to service it. Wealth Maximization is followed as it looks to increasing the market value of the firms share capital and thus leads to an overall development of the firm and its capacity.
What are the basic objectives of financial management?
The objective of financial management is wealth maximization rather than profit maximization. Wealth maximization means the total value of the firm.
Explain the rationale for selecting shareholders wealth maximizatio as the objective of the firm?
Explain the rationare for selecting shareholder wealth maximization as the objective of the firm.Include a consideration of profit maximization as an alternative goal
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 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.
Goal of the firm?
profit maximization &wealth maximization of shareholders.
The differences between goal of a firm and profit maximization?
A goal of firm isn't always profit driven, it can be any cause. Profit maximization is revenue driven, making more money is it focus.
What is 'value of a firm'?
The 'value of a firm' is connected with profit maximization. It is the present value of the firm's current profit and the future profit. It determines the value accurately.
What is a firm's value?
The 'value of a firm' is connected with profit maximization. It is the present value of the firm's current profit and the future profit. It determines the value accurately.
Among the multiplicity of objectives that a modern firm has profit maximization continues to be the most important Comment?
The success or failure of a firm is measured in terms of the amount of profit it is able to earn in a competitive market. Under profit management, one has to study various theories of profit, emergence of profit, functions of profit and its measurement, etc.Thoeries underlying the Objective of a Firm, mainly talk about the subject of Ethics in Business. Debate is going on since a long time, as to whether every Firm's Objective needs to be ETHICAL? the answer may seem as simple as "YES", but the counter arguements that follow are difficult to answer.Coming to Profit Maximization, the question goes as to whether Profit Maximization Goal is justitfied? In a private enterprise, no one can have control over Profit maximization. If the profits are made with the use of Society's resources, such profits need to be sowed back for Societal Development.The profit-maximization rule applies both to firms that are able to sell their product at a constant price and to firms that find they must reduce the price of their product to increase sales. In the real world, firms have to engage in trial-and-error discovery processes, searching for the profit-maximization point. But the process can be succinctly described by the marginal revenue-marginal cost rule.Profit is what is left over from a business after the bills are paid. without profit the company can not afford to re-invest in capital or have money to pay stockholders. I think Customer satisfaction if the basic motive and objective of firm. When we will more and more consider to satisfy customer needs and wants, automatically our secondary objective "profit maximization" will be achieved.
