Profit maximization does not adequately describe the goal of the firm because:
A) profit maximization does not require the consideration of risk.
B) profit maximization often has a short-term focus.
C) maximization of dividend payout ratio is a better description of the goal of the firm.
D) Both A and B
D
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If net income is $150,000 and interest expense is $20,000 for Year 2, what is the rate earned on total assets for the year?
a. 10.4% b. 11.9% c. 10.5% d. 8.4%
A company's profit is equal to its ________ minus its ________
A) markup; total costs B) revenue; total costs C) markup; fixed costs D) revenue; variable costs E) profit margin; variable costs
When cost relationships are linear, total variable prime costs will vary in proportion to changes in
a. direct labor hours. b. total material cost. c. total overhead cost. d. production volume.
Which of the following statements is correct about the risk-reward relationship of various types of risks?
A. Firm-specific risk is rewarded with additional returns. B. Default risk is rewarded with additional returns. C. Systematic risk is rewarded with additional returns. D. Unsystematic risk is rewarded with additional returns. E. Diversifiable risk is rewarded with additional returns.