The management objective of maximizing profit is relatively simple because the measure of profit used by ownership/management is the same between the privately held firm and the publicly traded firm.

Question

Quizplus · Accepted Answer

The measure of profit can differ significantly between privately held firms and publicly traded firms due to differences in their financial objectives, shareholder expectations, and regulatory requirements. Publicly traded firms often focus on short-term earnings and stock price, while privately held firms may prioritize long-term growth and sustainability.

The Management Objective of Maximizing Profit Is Relatively Simple Because