When the goals of stakeholders conflict with each other, financial managers usually adopt the view that the preferences of internal stakeholders, such as managers and employees, should be given the most weight.

Question

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Financial managers typically prioritize the interests of external stakeholders, such as shareholders and creditors, over internal stakeholders when their goals conflict. This is because external stakeholders have a greater impact on the financial health of the company.

When the Goals of Stakeholders Conflict with Each Other, Financial