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Profit maximisation criterion
Profit maximisation criterion is unsuitable and inappropriate as an operational objective of financing, investment and dividend decisions of a firm. It isn't only vague and time value of money. It follows from the above that a suitable operational decision criterion for financial management should
(i) be exact andprecise,
(ii) be based on "bigger the better" principal,
(iii) consider both quantity and quantity dimensions of benefits
(iv) recognise the time value of money. Alternative to profit maximisation that is wealth maximisation is one such measure.
Determine the Objectives of the Firm Objectives of the Firm - Profit Maximisation and Wealth Maximisation To put it simply, we may say that goal of any business is to max
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