Explain profit maximization approach, Financial Management

Assignment Help:

Q. Explain Profit Maximization Approach?

(i) Best Criterion on Decision-Making:- The goal of revenue maximization is regarded as the best criterion of decision-making as it offers a yardstick to judge the economic performance of the enterprises.

(ii) Proficient Allocation of Resources: - It leads to proficient allocation of scare resources as they tend to be diverted to those uses which in terms of profitability are the most desirable.

(iii) Optimum Utilization: - Optimum consumption of available resources is possible.

(iv) Utmost Social Welfare: - It make sure maximum social welfare in the form of timely payment to creditors, maximum dividend to shareholder, higher wages, better quality and lower prices, more employment opportunities to the society and maximization of capital to the owners.


Related Discussions:- Explain profit maximization approach

Calculate the interest value , 1. Suppose a firm's tax rate is 35%. What af...

1. Suppose a firm's tax rate is 35%. What affect would a $10 million operating expense have on this year's earnings?  What effect would it have on next year's earnings? 2. What

S&p cnx 500, S&P CNX 500 Here, the stocks are included as per their res...

S&P CNX 500 Here, the stocks are included as per their respective market capitalization. It includes companies which lead in their respective industry sector. They should close

What do you mean by equity, Q. What do you mean by Equity? Equity - Res...

Q. What do you mean by Equity? Equity - Residual INTEREST in ASSETS of an entity which remains after deducting its LIABILITIES. Additionally, amount of a business' total assets

Location of lifting anchors in precast concrete units, Q. Location of lifti...

Q. Location of lifting anchors in precast concrete units? It is desirable that position of anchors be located symmetrical to the centre of gravity of precast concrete units. Or

Illustrate the comparison between equity and debt, Illustrate the compariso...

Illustrate the comparison between equity and debt Equity and Debt: A Comparison 1. Equity shares don't carry any fixed charges on them. If company doesn't generate positiv

Convertible bonds, The issuer offers bonds with an option to the investor t...

The issuer offers bonds with an option to the investor to convert these bonds into equity shares at a pre-fixed ratio. These can be fully convertible bonds or partly co

Define how the market determine the fair value of a bond, How does the mark...

How does the market determine the fair value of a bond? The bond’s fair value is the present value of the bond's coupon interest payments plus the present value of the face value

What do you mean by present value of a future sum, Q. What do you mean by P...

Q. What do you mean by Present Value of a Future Sum? The present value of a future sum will be worth less than the future sum because one foregoes the opportunity to invest an

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd