Question

Which of the following best describes the goal of the firm?A) Maximizing the firm's profits.B) Maximizing the value of the firm's equity.C) Maximizing the value of the firm's debt.D)Minimizing the firm's risk.E) Maximizing the current dividend paid to shareholders.

Answer 1

The correct question should be:

Which of the following best describes the goal of a firm?A) Maximizing the firm's profits.B) Maximizing the value of the firm's equity.C) Maximizing the value of the firm's debt.D)Minimizing the firm's risk.E) Maximizing the current dividend paid to shareholders.

Answer: Maximizing the firm's profits.

Explanation:

The Goal of a Firm is the objective that; that Firm seeks to achieve on a regular basis or after a specified period. In most cases the aim of opening a business is to make profit, therefore maximizing profit can be a goal of a business organization.

Answer 2

Answer:

A) Maximizing the firm's profits.

Explanation:

In economics, profit motive underscores the motivation of firms because they operate make money by maximizing profits. Put differently, the ultimate goal of a business is to maximize the wealth of its shareholders which is a direct function of profit maximization.

The profit motive of business entities is very central to its existence because it is globally observed to be correct that businesses shut down when they are unprofitable.