Question

A financial manager's goal of maximizing current or short-term earnings may not be appropriate because:___________.

Answer 1

Answer:

The correct answer is the option D: All of the other answers are correct.

Explanation:

To begin with, the fact that it is not reasonable to think in short periods of time when it comes to business management is because basically the short term earnings can be very subjective principally depending on how the company define it, being the accounting and the economic ways of doing it very different and impacting differently as well on the company's way of thinking. Moreover, a company's primary focus must always be on the long run due to the timing that the benefits really impact in the company's accounts and therefore in the pocket of the shareholders or owners.