Wealth maximization

Due to limitations of the objectives of profit maximization, it is suggested that the objective of the firm should be maximization of the value of the firm. Wealth maximization means maximizing the net present value of a course of action. The net present value of its benefits and the present value of its costs. A financial action resulting in positive net present value should be accepted . Negative net present value should be rejected. Net present value calculated as follows:
NPV=CF/(1+k)+........CF/(1+k)-I