Setting a Goal of Profit Maximization Has All of the Following

question 36

Multiple Choice

Setting a goal of profit maximization has all of the following drawbacks except:

• A) investors understand that generally, more profit is better
• B) Risk may increase as profit changes
• C) Profit fails to take into account the timing of benefits
• D) Accurately measuring profit is almost impossible

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Definitions:

Investment Funds

Pooled funds that collect capital from multiple investors to invest in securities, real estate, or other assets, according to a predetermined strategy.

Capital Rationing

The process by which management allocates funds among competing capital investment proposals.

Capital Investment

Funds invested in a business with the intent to further its objectives, such as acquiring new assets or launching new ventures.

Investment Funds

Pooled funds from multiple investors used to collectively invest in securities such as stocks, bonds, or other assets, managed by professionals.