1. In Financial Management, "Wealth Maximization" is considered superior to "Profit Maximization" because:
It ignores cash flows.
It focuses on short-term goals.
It ensures zero debt.
It considers the time value of money and risk.
Explanation:
Profit maximization is vague, short-term, and ignores risk/timing. Wealth maximization (maximizing stock price/NPV) accounts for timing, cash flows, and risk, serving the long-term interest of shareholders.