61. Wealth maximization is considered to be superiorto profit maximiza – InterviewSolution

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1.	61. Wealth maximization is considered to be superiorto profit maximization because,
Answer» <p>Maximization of profits is regarded as the proper objective of the firm, but it is not as inclusive a goal as that of maximizing stockholder wealth. For one thing, total profits are not as important as earnings per stock.Therefore, wealth maximization is superior in a way that it is based on cash flow, not on the accounting profit.Wealth maximization is superior because it values the duration of expected returns. Since distant flows are uncertain, converting them into comparable values at base period facilitated better comparison of financial projects.</p>

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