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Short Term View or Long Term View? After reading the first two chapters of your textbook, evaluate the following statement: Managers should not focus on the current stock value because doing so will...

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Short Term View or Long Term View?

After reading the first two chapters of your textbook, evaluate the following statement:

Managers should not focus on the current stock value because doing so will lead to overemphasis on short-term profits at the expense of long-term profits.

In your post, explain what is meant by this statement. Describe how management might decide whether to focus on short term or long term goals and how that decision impacts the organization. Next, using the financial balance sheet as displayed in the text, compute an example of how focusing on short term profits can be detrimental to long term profits. Share your opinion regarding whether you feel it’s a better option to focus on short term or long term goals. Use evidence from the text or external sources to support your position. Your post should be XXXXXXXXXXwords in length.
Answered Same Day Jul 06, 2021

Solution

Shakeel answered on Jul 06 2021
137 Votes
The statement clearly says that cu
ent stock value might be affected by several short term factors that may not sustain in future. Therefore, focusing on it may lead to short term profits but hamper the long term objective of the firm and huge loss mat occu
ed in long run.
Firm may have both short term and long term goals. Firm may focus either of them or both at a time. The necessity and cost attached with the goal are factors that should be considered before deciding. For example, if overhead cost reduction is short term goal then the long term goal of profit and...
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