Maximizing accounting profits
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1 Assume a firm has pursued a goal of maximizing accounting profits in a purely literal sense and, as a result, has had positive, as well as growing profits since their inception. Which of the following statements is true?
The firm .....
a. is pursuing the primary goal of the organization
b. is acting in the best interests of all stakeholders
c. is, by definition, also maximizing shareholders' wealth
d. may possibly be heading toward insolvency (i.e. bankruptcy) (due to insufficient cash flow)
e. None of the above or insufficient information
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1 Assume a firm has pursued a goal of maximizing accounting profits in a purely literal sense and, as a result, has had positive, ...
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