The ultimate objective of investment and financing decisions is to maximise:
A)the number of projects the company is invested in.
B)the amount added to the value of the owner's wealth.
C)the salaries of all employees of the firm.
D)the repayments that are made of debt.

Question

Quizplus · Accepted Answer

The primary goal of investment and financing decisions is to increase the value of the owner's wealth, which is achieved by maximizing the return on investment or increasing the stock price. Other objectives, such as adding more projects or increasing employee salaries, may be important but are ultimately secondary to the goal of maximizing owner's wealth. Repayments of debt are important but only as a means to achieve the primary objective of maximizing owner's wealth.

The Ultimate Objective of Investment and Financing Decisions Is to Maximise