Profit Maximization Is an Ambiguous Guide to Decision Making in the Private

question 7

Multiple Choice

Profit maximization is an ambiguous guide to decision making in the private sector because:

• A)firms in the private sector usually do not aim at profit maximization.
• B)the goal of profit maximization contradicts the goal of satisfying the firm's shareholders.
• C)of the presence of risk and uncertainty.
• D)profit-maximization ignores social costs and benefits.
• E)profit cannot be defined clearly.

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Definitions:

Financial Performance

An overview of how well a business is using its assets to generate profits and cash flow, often analyzed through financial statements.