In the opinion of a group of major shareholders, during the past five years the directors of Alex plc have run the company in a way that has been designed solely to increase the prestige in the business community.
According to William Baumol this characteristic of the company is most likely to be evident in the directors’ aim to:
Select ONE answer:
- Maximise wealth
- Maximise sales revenue
- Minimise costs
- Minimise social impact
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 2
- Notcorrect
- Correct –> William Baumol argued that businesses act to maximise sales revenue whenever managers are rewarded or revered for the size of the organisation for which they work rather than its profitability or relative performance.
- Not correct
- Not correct
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