Answer to Question #225847 in Finance for Anisha Kumar

Question

Would a manager confronted with given circumstances necessarily make the same decision when pursuing either profit- or wealth-maximising objectives? Explain with an example.

Answer 1

A manager should maintain the value of the company at a higher level. Therefore, provided the organization needs to be a respective standards, the manager needs to make decisions considering the profit maximizing objectives. For instance, a vehicle company may be receive reports about poor performance of the current machines. The manager should not consider getting the vehicle out of market. He or she should come up with a strategy to market the respective products so that the innovative ones would be introduced.