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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.
Liabilities The company must take into account the nature of its liabilities as well as its solvency position. Cash Flows: Besides the investment yields, money flows as paid
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Example of Company Objectives Divide from the problem of which goal a company ought to pursue are the questions of which goals companies claim to pursue and which goals they a
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what are the arguments in favour of profit maximization?
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Why do total assets equal the sum of total liabilities and equity?Explain. Assets = Liabilities + Equity Assets are the entities of value a business owns. Liabilities ar
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