The maximization of profit in the long-term equates to the maximization of the firm's value, where this value is equal to the Net Present Value of the firm's projected future cash flows

Question

Quizplus · Accepted Answer

This is true as the Net Present Value (NPV) of a firm's expected future cash flows reflects the firm's ability to generate profits in the long run. By maximizing profits, a firm increases its cash flows which in turn increases the firm's value (NPV) in the long term.

The Maximization of Profit in the Long-Term Equates to the Maximization