If a firm establishes maximizing profits as the most important goal of the firm, which of the following would not be given proper consideration?
A) Sales revenues
B) Profits
C) Risk of bankruptcy
D) Cost of goods sold

Question

Quizplus · Accepted Answer

When a firm establishes maximizing profits as its most important goal, it implies that all other goals, including sales revenues, profits, and cost of goods sold, will be given due consideration in order to maximize profits. However, the risk of bankruptcy may not be given adequate consideration as maximizing profits may lead firms to undertake risky business ventures with the intention of earning higher profits. Thus, risk management may not be prioritized in such firms.

If a Firm Establishes Maximizing Profits as the Most Important