Discuss the concepts of ‘Profit maximisation’ and ‘Wealth maximisation’ and analyse which concept is superior to be an objective of a Firm

Profit maximization and wealth maximization are two different concepts that are used by firms as objectives to guide their decision-making processes.

Profit maximization is a traditional objective of firms, where the primary aim is to increase profits by maximizing revenues and minimizing costs. This approach is based on the assumption that the primary goal of a firm is to generate profits for its shareholders, and any decisions made by the firm should be aimed at achieving this goal.

On the other hand, wealth maximization is a modern objective of firms, where the primary aim is to maximize the net present value (NPV) of the firm. The NPV of a firm is the difference between the present value of cash inflows and the present value of cash outflows, and this approach is based on the assumption that the primary goal of a firm is to create wealth for its shareholders over the long term.

While both profit maximization and wealth maximization are objectives that firms can adopt, there are some key differences _______ _______ ____ ______ ________ ______ ________ _________.
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