One problam with profit max is how do we determine what is profit

Profit is just revnu – expenses which give u accounting profit of A company

Accounting profit only consider explicit cost while economic profit consider both explicit and implicit
cost

2 accounting profit are not necesserly are same as cash flow

3. it does not distinguish between getting money today and getting the same amount of money at some
point in the future

4. profit max increase uncertenity (risk) associated with future cash flow .

The risk premium is the extra return which an investor expect to receive when extra risk is added in his
or her investment portfolio