Process of ambiguity - profit maximisation criterion, Financial Management

Assignment Help:

Process of Ambiguity - profit maximisation criterion

One practical difficulty with profit maximisation criterion for financial decision making is that term-profit is a vague and ambiguous concept. It has no precise connotation. It is amenable to various interpretations by various people. To illustrate, profit may be long term or short term; it can be total profit or rate of profit; it may be before-tax or before-tax or after-tax; it may be total assets or shareholders equity or return on total capital employed and so on. If profit maximisation is taken to be objectives, the question arises, which of these variable of profit must a firm try to maximise? Apparently, a loose expression like profit of operational criterion for financial management.

 


Related Discussions:- Process of ambiguity - profit maximisation criterion

Investment of surplus cash, I need a report on the topic Investment of Surp...

I need a report on the topic Investment of Surplus Cash. Can you please assist me for Investment of Surplus Cash report for about 2000 words?

What are classes of institutions that issue bonds in the usa, What are the ...

What are the main classes of institutions that issue bonds in the USA? There are three major classes of institutions which issue bonds in the USA: national governments, local g

Bankruptcy and bondholder rights, The holder of a corporate debt inst...

The holder of a corporate debt instrument is preferred to equity shareholders in the bankruptcy proceedings. However, secured/senior creditors are preferred to no

Calculate the net investment of the firm, Problem: i) Assume a firm bu...

Problem: i) Assume a firm buys a new tooling machine for Rs 2000,000, installation costs net of taxes are Rs 300,000. An existing asset has a book value of Rs 400,000 and the

Explain compound value concept, Q. Explain Compound Value Concept? The ...

Q. Explain Compound Value Concept? The Compound Value Concept is used to find out the FV of present money. It is the same as the concept of compound interest, wherein the inter

Calculate the acid test ratio, FIXED ASSETS                          200 00...

FIXED ASSETS                          200 000                       LONG TERM LIABILITIES CURRENT ASSETS CASH             40 000                       LOAN

State the term- overtrading, State the term- Overtrading Overtrading ta...

State the term- Overtrading Overtrading takes place when a company has insufficient finance for working capital to support its level of trading. The  company  is  growing  rapi

Portfolio management, Portfolio Management: Project Portfolio Manageme...

Portfolio Management: Project Portfolio Management (PPM) is the centralized management of processes, technologies and methods used by project management offices (PMOs) and pro

Limitation of profit maximisation -quality of benefits, Limitation of pro...

Limitation of profit maximisation -Quality of Benefits Probably the most vital technical limitation of profit maximisation as an operational objective, is that it ignores qua

Tax consideration affect cost of debt and cost of equity, How do tax consid...

How do tax considerations affect the cost of debt and the cost of equity? As interest on debt is tax deductible to the issuing firm, as much higher the tax rate the lower the aft

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