1. Explain why profit maximization is not the best goal for a company. What is a

Question

1. Explain why profit maximization is not the best goal for a company. What is an appropriate goal and why?

2. Give an example of a conflict of an interest in a business setting (a personal one would work) other than the one involving the real estate agent discussed in the text.

3. Does maximize profit ignores the timing of future cash flows?

4. Why does conflicts of interest exist?

5. What are the major reasons for accounting scandals (WorldCom, Enron, etc.)? How do firms attempt to meet Wall Street analysts

Explanation / Answer

1. Explain why profit maximization is not the best goal for a company. What is an appropriate goal and why?

Every company and its business is run based on going concern assumption with view to develop and expand in foreseeable future.

Profitability is one of the factors analysed for company

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