2. Many firms still focus on profitability as their main measure of performance, despite increasing evidence that non-financial measures are often more important. Required: (a) Explain the argume

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2.

Many firms still focus on profitability as their main measure of performance, despite increasing evidence that non-financial measures are often more important.

Required:

(a)    Explain the arguments for using the profit measure as the all-encompassing measure of the performance of a business.

(b)     Explain the limitations of this profit-measurement approach and of undue dependence on the profit measure.

(c)       Explain the problems of using a broad range of non-financial measures for the short- and long-term control of a business.

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