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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.
What is the basic goal of a business? The primary financial goal of the business organizations is to maximize the wealth of the firm's owners. In turn Wealth refers to value.
This question tested the core area of specifically gradually consolidation and acquisitions (control to control). The principle of calculation of goodwill at the date where control
The dividend is the part of the net income that the company distributes to shareholders. As the dividend represents real money, the net income is also real money. Is that true?
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