Profit maximization - objectives of business entity, Finance Basics

Assignment Help:

Profit maximization - Objectives of Business Entity

Conventionally, this was considered to be the main goal of the firm. Profit maximization refers to getting the highest possible profits throughout the year.  This would be achieved via either increasing sales revenue or via reducing expenses.  Notice as:

Profit = Revenue - Expenses

The sales revenue can be increased through either volume selling price or the increasing the sales. However it should be differentiated, such maximizing sales revenue may on the same time effect to increasing the firm's expenses. However the pricing mechanism will, assist the firm to determine such goods and services to give so as to maximize profits of the firm.

The profit maximization goal has been criticized since of the following like:

  • It avoids time value of money
  • It avoiders uncertainties and risk
  • It is vague
  • It ignores another participant in the firm quite than shareholders.

Related Discussions:- Profit maximization - objectives of business entity

Australi a, i ordered case study 1 susam and malcom. when i open the docume...

i ordered case study 1 susam and malcom. when i open the document is completely different, not the same case study an is only relivent in the usa not australia... do you have the c

What are the types of orders, What are the Types of orders (i) Spot ...

What are the Types of orders (i) Spot Delivery: Spot delivery means delivery and payment on the same day as date of the contract or on the next day. (ii) Hand Delivery:

The lcm rule, Require  the relevant authoritative literature on the lower- ...

Require  the relevant authoritative literature on the lower- of- cost- or- market rule for valuing inventory using the FASB's Codification Research System. Clarify the circumstance

Business finance and financial management, Business Finance and Financial M...

Business Finance and Financial Management Business finance is the process through which a financial manager or accountant gives finance for business use as and whenever it i

Important points for shareholders and creditors, Important Points for Share...

Important Points for Shareholders and Creditors 1. In raising capital, the borrowing firm will constantly question the financial securities in form of preference shares

Risk adjusted discounting rate – methods of computing cost, Risk Adjusted D...

Risk Adjusted Discounting Rate - Methods of Computing Cost of Capital This method is used to establish the discounting rate to be used for a provided project. The cost of capi

Calculate the nominal, calc the nimonal(annual percentagerete)interest rate...

calc the nimonal(annual percentagerete)interest rate if the iffective interest rate earned on an investment is 16.08%/Unum but interest is calculated at the end of each month

Sources of funds - finance, Sources of Funds - Finance Venture capital...

Sources of Funds - Finance Venture capital, with combining risk financing along with marketing assistance and management, could become an effective instrument in fostering dev

Finance.., the nominal fee interest rate in your account is 7% your semi-an...

the nominal fee interest rate in your account is 7% your semi-annually rate of interest APY will be?

Overlaps and conflicts, Overlaps and Conflicts Overlaps - whenever...

Overlaps and Conflicts Overlaps - whenever attaining ONE MEANS achieving the another Conflicts - whenever attaining ONE CANNOT permit the achievement of another.

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