​Explain the Difference Between Profit and Contribution in an Objective

question 29

Essay

​Explain the difference between profit and contribution in an objective function. Why is it important for the decision
maker to know which of these the objective function coefficients represent?

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Definitions:

Break Up Value

The estimated total value of a company if its assets were sold separately rather than as a going concern.

Asset Play

An investment strategy based on buying stocks of companies that are considered to have undervalued assets by the investors.

Forecast Future Earnings

The process of predicting a company's future profits based on historical data, current trends, and analysis of the firm's industry and economy.

Securities Analysis

The process of evaluating a security (stocks, bonds, etc.) in terms of its risk, value, and investment potential.