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What to do to maximise profits of the company
If you want to maximise profits, there are only two methods to do it. Either you decrease your expenses (also known as costs) or you increase the sales (also known as revenues).Both of these aren't easy to achieve. Sales can be increased by increasing the price of the products or byselling more products. Selling moreproducts is difficult due to the competition in the market and you can't increase the price of the products withoutadding more features or value to it (presuming a competitive market). If you're a competitive company, decreasing expenses beyond a certain level is possible only byreducing investments in research, advertising and development, etc. which eventuallyleads to reduction in sales in the long term and threatens the survival of company. Profit maximisation goal supposes that many of the complexities of the real world don'texist and is, thus, not acceptable.
Roxanne invested $560,000 in a new business 7 years ago. The business was expected to bring in $8,000 each month for the next 26 years (in excess of all costs). The annual cost of
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