Profit Maximization is considered to be a more appropriate goal than shareholder

Question

Profit Maximization is considered to be a more appropriate goal than shareholder wealth maximization because it considers the timing of the expected returns of the firm. The income from a partnership is reported by the partners on their personal tax returns. Interest and dividend payments made by a corporation are both tax deductible by the paying corporation. Ethical considerations are not relevant in the financial management. Product differentiation helps reduce competition and thereby allows for larger profits. Accounts receivable turnover gives us the same information as the average collection period. Times interest earned is equal to net income divided interest expense. Total asset turnover tells us how efficiently management is using the firm's assets. The current ratio is more conservative than the acid-test ratio. Return on equity measures the dividends investors received in the current year. The future value of an investment can be increased by reducing the numbers of

Explanation / Answer

1 FALSE The main motive should be shareholders wealth maximization 2 FALSE The Income Tax return of the partnership firm is being filed separately 3 FALSE Both are not tax deductible 4 FALSE Ethical Consideration is relevant 6 FALSE Both gives different informations to us 7 FALSE Times Interest Earned = Income before interest and debt/ Interest Expense

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