Which of the following statements is incorrect?  Maximixing accounting profit is not an appropriate goal for financial managers as accounting profit ignores the risk associated with firm’s cashflow. You Answered  Maximizing the share price is equivalent to choosing projects with relatively high cashflows and relatively low risk.   Maximizing the share price is an appropriate goal for financial management as it maximizes the wealth of the owners of the business.   Accounting profit may depend on how accounting principles are applied. Correct answer  Maximixing accounting profit is an appropriate goal for financial managers as accounting profit represents cashflow that can be distributed to shareholders, or re-invested in the business.

The statement "Maximizing accounting profit is an appropriate goal for financial managers as accounting profit represents cashflow that can be distributed to shareholders, or re-invested in the business" is incorrect.

Here's why:

1. Accounting profit does not equal cash flow: Accounting profit is calculated by subtracting total expenses from total revenues. However, not all revenues and expenses are cash-based. For example, depreciation is a non-cash expense that reduces accounting profit but does not affect cash flow.

2. Ignoring risk: Maximizing accounting profit does not take into account the risk associated with the firm's cash flows. Financial managers need to consider the risk and return trade-off.

3. Short-term focus: Maximizing accounting profit can lead to a short-term focus, potentially at the expense of long-term profitability and shareholder value.

4. Accounting principles: Accounting profit can be influenced by the choice of accounting principles and policies, such as revenue recognition and depreciation methods. These choices can distort the true economic profitability of the firm.

The primary goal of financial managers should be to maximize shareholder wealth, which is typically reflected in the company's share price. This involves choosing projects that increase cash flows and managing risk appropriately.