Should a company allow the owners to use the resources as they see fit?
Should a company allow the owners to use the resources as they see fit?
solution :
Should a company allow the owners to use the resources as they see fit?
No a company shall not allow the owners to use the resources as they see fit .
A company is a separate legal entity and shall be managed by the board of directors who works on behalf of the owners with a primary objective of maximization of shareholders wealth .
The value and weal of a company maximizes when the future earning potential of the company improves . To see a growth in the future earning potential company must take up the capital budgeting decisions wisely . The project giving positive Net Present Values shall only be accepted.
While the company take on the projects it need adequate resources so as to ensure that the project don’t become a failure . Moreover a company needs proper and sufficient resources to carry on its day to day operations
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