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A firm cannot survive with mere profit maximization, but must increase long-term security through investment and meeting shareholder expectations. This will increase their productive capacity for the furture as well as encourage the risky capital investment of the shareholders.
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What are some of the problems involved in the use of profit maximization as the goal of a firm?
Uncertainity and timing are some of the problems
Is profit maximization an appropriate for a business?
Profit maximization is the ONLY appropriate goal for a business. Even under a so-called "social responsibility" regime, a business only engages in such schemes because it thinks it can increase profits by doing so.
The primary goal of a biotechnology company is to?
The Primary goal is to make all living and nonliving things live longer and better.
What are the uses of cost volume profit analysis?
1 - Goal setting 2 - Marketing strategy 3 - Operational effeciancy 4 - Pricing strategy
What is a realistic percentage for payroll costs in a small retail business?
A good goal would be 20 - 25% of Gross Profit (Sales - COGS). A realistic number might be 30%.
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
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 are some of the problems involved with the use of profit maximization as the goal of the firm How does the goal of maximization of shareholder wealth deal with those problems?
Problems involved with the use of profit maximization as the goal of the firm due to numbers of reasons. 1 It ignore the timing of return. 2 It ignores the timing of returns. 3 It ignores the risk.
What are some of the problems involved in the use of profit maximization as the goal of a firm?
Uncertainity and timing are some of the problems
Is profit maximization an appropriate for a business?
Profit maximization is the ONLY appropriate goal for a business. Even under a so-called "social responsibility" regime, a business only engages in such schemes because it thinks it can increase profits by doing so.
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.
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
Maximization of shareholder wealth as a goal is superior to profit maximization because?
it is operating cost
Why is profit maximization a primary goal to an organisation?
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Why profit maximization is not an appropriate goal of a firm?
Profit maximization is often criticized as an inappropriate goal for a firm because it can lead to short-term thinking at the expense of long-term sustainability. Focusing solely on profits may neglect other important factors such as employee welfare, environmental responsibility, and customer satisfaction, which are crucial for maintaining a positive reputation and fostering loyalty. Additionally, prioritizing profit can create ethical dilemmas and harm stakeholder relationships, ultimately jeopardizing the firm's future success. A more balanced approach, considering various stakeholders' interests, often leads to sustainable growth and stability.
Is Profit maximization the primary goal of any business enterprise?
Yes, profit maximization is the primary goal of a business. If a business doesn't maximize profits the Board of Directors can request that the CEO leave.
