Short Term Maximization of Profit Will Always Lead to Long

question 14

True/False

Short term maximization of profit will always lead to long term profit maximization and, therefore, to the maximization of the firm's value

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Definitions:

Delivery Gap

The difference between a company's service quality performance compared to customer service expectations.

Zone Of Tolerance

The area between customers’ expectations regarding their desired service and the minimum level of acceptable service—that is, the difference between what the customer really wants and what he or she will accept before going elsewhere.

Standards Gap

The difference between the quality standards set by a company for its products or services and the actual performance perceived by customers.

Communications Gap

A situation where there is a difference or conflict between the message sent and the message received, often leading to misunderstanding.