MANAGERIAL ECONOMICS REDEFINED AND FIRMS'VALUE.PART 1

We redefined the context of managerial economics and charts a new dawn in the academic appraisal of firm's vavalue In the book Managerial Economics by Edwin Mansfield,methinks we quite agree that in theory of firm,firm generally tends to maximise their value and has control over its value and can set at any level it chooses contrary to mansfield irrespective of constraints.Constraint factors on the limitation of value such as limitation of input factor,related capacity constraints in respect of procurement of materials,human resources,specialised equipments,timing of expansion,dearth of technology,legal and contractual constraints and taxes.They can limit the cashflow or ratio of profit it can generate and constraint on a firm's actions main analytical relevant techniques for this problems are contained in constrained techniques like linear programming etc.A firm's value is defined as the present value of expected future cash flow and as expressed in the equation=#1%1+i+#2%(1+i)2+....+#n%(1+i)n=£nt=1%(1+i)t.where # is expected profit in year t,i is interest rate and t moves from1(next year)to n(last year of planning spot)