What Are the Two Difficulties That May Make Profit Maximization

question 3

Essay

What are the two difficulties that may make profit maximization an ambiguous guide to decision making? Explain.

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Definitions:

Assets And Liabilities

Resources owned and controlled by a business (assets) and obligations to transfer resources to another entity (liabilities).

Current Rate Method

An accounting technique used in currency translation where assets and liabilities are converted at the current exchange rate.

Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much one currency can be exchanged for another currency.

Functional Currency

The primary currency of the primary economic environment in which the entity operates, usually the local currency or the currency of the primary sales market.