Explain as to how the wealth maximization objective is superior to profit maximization objective
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hloo frnd and your answer is as follows......
the key differences between profit maximization and wealth maximization are as follows:
1.The process through which the company is capable of increasing earning capacity is known as profit maximization . On the other hand, the ability of company in increasing the value of its stock in the market is known as wealth maximization.
2.Profit maximization is the short term objective of the firm while the long term objective is wealth maximization.
3.Profit maximization avoids time value of money but wealth maximization recognises it .
so because of these reasons we can say that wealth maximization objective is superior than profit maximization.
hope it helps u...☺☺
the key differences between profit maximization and wealth maximization are as follows:
1.The process through which the company is capable of increasing earning capacity is known as profit maximization . On the other hand, the ability of company in increasing the value of its stock in the market is known as wealth maximization.
2.Profit maximization is the short term objective of the firm while the long term objective is wealth maximization.
3.Profit maximization avoids time value of money but wealth maximization recognises it .
so because of these reasons we can say that wealth maximization objective is superior than profit maximization.
hope it helps u...☺☺
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