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Q. Merits of Wealth Maximization Approach?
Merits of Wealth Maximization Approach:-
The wealth maximization schema is superior to the profit maximization approach because:
1. Wealth maximization approach utilizes cash flows instead of accounting profits which avoids the ambiguity regarding the exact meaning of the term profit.
2. Wealth maximization approach gives due significance to the time value of money by reducing the future cash flows by an appropriate discount or interest rate.
Assume we are in the midst of the financial crisis in October 2008. Your firm is considering the purchase of a 10 year put option on the S&P 500 Index. You are analyzing the pricin
what is mean by breakeven point
Q. What is Qualities of Pay Back Method? Qualities of Pay Back Method:- (i) Simple: - The most important merit of this method is that it is simple to understand and easy to
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