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5. As economists, one is trained to view a firm from the point-of-view of profit-maximization, where firms are profit-maximizers, generally equating marginal costs to marginal

5. As economists, one is trained to view a firm from the point-of-view of profit-maximization, where firms are profit-maximizers, generally equating marginal costs to marginal revenue with respect to production. However, in business, a business manager is trained to evaluate firm performance on the basis of cash flow and the opportunity cost of that cash flow (and hence operating profits). From the point-of-view of a business manager, explain why incremental cash flow are significant in business decision-making and relate this concept to why cash-non-profits-is king.

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