What is profit maximisation criterion, Financial Management

Assignment Help:

Profit maximisation criterion

Profit maximisation criterion is unsuitable and inappropriate as an operational objective of financing, investment and dividend decisions of a firm. It isn't only vague and time value of money. It follows from the above that a suitable operational decision criterion for financial management should

(i) be exact andprecise,

(ii) be based on "bigger the better" principal,

(iii) consider both quantity and quantity dimensions of benefits

(iv) recognise the time value of money. Alternative to profit maximisation that is wealth maximisation is one such measure.

 


Related Discussions:- What is profit maximisation criterion

Factors determining dividend policy, Q. Factors Determining Dividend Policy...

Q. Factors Determining Dividend Policy? (1) Financial Needs of the Firm: - Financial requirement of a firm are directly related to the investment opportunities available to it.

Define trustworthy collateral from the lenders perspective, What is trustwo...

What is trustworthy collateral from the lenders' perspective?  Explain whether accounts receivable and inventory are trustworthy collateral. Assets which are readily marketable

Accrued dividend, It is an accounting term which refers to the balance shee...

It is an accounting term which refers to the balance sheet item that accounts for dividends that have been confirmed but not yet given to shareholders. Accrued dividends are taken

Explain the tests of controlor systems based auditing, Tests of controlor s...

Tests of controlor systems based auditing Tests to obtain audit evidence about effective operation of the accounting and internal control systems. It isn't concerned about deta

Prepare a report for the managing director, The Managing Director of your f...

The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some theorists adva

Brainstorming, Brainstor ming An idea production strategy that exc...

Brainstor ming An idea production strategy that exclusively encourages any and all alternatives while withholding any appreciation of those options.

Define merger activity in the past decade affected assets, How has the merg...

How has the merger activity in the past decade affected the concentration of assets in the banking industry? A: Over the last decade, some commercial banks declined by twenty-o

Monetary policy, Monetary Policy The Federal Reserve's goal is to regul...

Monetary Policy The Federal Reserve's goal is to regulate the growth of the monetary aggregates to ensure sufficient credit expansion to foster economic growth, without inflati

Leverage, Evaluate the importance of leverage of financial management on a ...

Evaluate the importance of leverage of financial management on a small scale company.

Illustrate the term quality of benefits, Illustrate the term quality of ben...

Illustrate the term quality of benefits It is clear from Table that total returns associated with two alternatives are identical in a normal situation but range of variati

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