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Describe how society's interests can influence financial managers.
Occasionally the interests of a business firm's owners are not similar as the interests of society. For example, the cost of properly disposing of toxic waste can be very high that companies may be tempted to just dump their waste in nearby rivers. Thus, the companies can maintain costs low and profits high, and drive their stock prices higher (if they are not caught). Though, several people suffer from the polluted environment. This is why we have environmental and other identical laws: that is why the society's best interests take precedence over the interests of individual company owners.
While businesses take a long-term view, the interests of the owners and society frequently (but not always) coincide. While companies encourage recycling, sponsor programs for disadvantaged young people, run media campaigns promoting the accountable use of alcohol, and contribute money to worthwhile civic causes, the goodwill produced as a result of these activities causes long-term increases in the firm's sales and cash flow that translate into additional wealth for the firm's owners.
A City has determined that building a new water distribution system using a new source of water would have an annual costs of $5,750,000 and annual net benefits of $4,250,000. The
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