In relation to the financial objectives of a business entity, distinguish between the terms “maximizing” and “satisficing”.

      

In relation to the financial objectives of a business entity, distinguish between the terms “maximizing” and “satisficing”.

  

Answers


Kavungya
Maximizing entails reporting the highest profit in the course of the year. Shareholders will want
the managers to engage in policies that will result in the maximum profits.

Satisficing is a decision-making strategy that attempts to meet an acceptability threshold. This is
contrasted with optimal decision-making, an approach that specifically attempts to find the best
option available. A satisficing strategy may often be (near) optimal if the costs of the decision-
making process itself, such as the cost of obtaining complete information, are considered in the
outcome calculus.
Kavungya answered the question on March 30, 2022 at 07:09


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