Question 1

Which of the following is true of investment value as a standard of valuation?

Accepted Answer

A)  Investment value is usually lesser fair value. 
B)  Investment value is usually lesser than fair market value. 
C)  Investment value is usually greater than book value. 
D)  Investment value is usually greater than fair value. 
A)  Investment value is usually lesser fair value. 
B)  Investment value is usually lesser than fair market value. 
C)  Investment value is usually greater than book value. 
D)  Investment value is usually greater than fair value.

Question 2

Explain the two methods that are commonly considered under the market approach of valuation of the company.

Accepted Answer

Under the market approach, a company's v

Question 3

Which of the following gives the calculation of the capitalization rate?

Accepted Answer

A)  the equity risk premium plus the specific company risk premium 
B)  the required rate of return minus the risk free rate 
C)  the dividend payout rate plus the long-term sustainable growth rate 
D)  the discount rate minus the expected long-term sustainable growth rate 
A)  the equity risk premium plus the specific company risk premium 
B)  the required rate of return minus the risk free rate 
C)  the dividend payout rate plus the long-term sustainable growth rate 
D)  the discount rate minus the expected long-term sustainable growth rate

Question 4

Which of the following should be the first phase of analysis of information gathered for a business valuation engagement?

Accepted Answer

A)  identifying significant relevant factors 
B)  reconciling information collected with the financial statement analysis 
C)  analysis of the company's financial statements 
D)  developing a discount rate 
A)  identifying significant relevant factors 
B)  reconciling information collected with the financial statement analysis 
C)  analysis of the company's financial statements 
D)  developing a discount rate

Question 5

Lilac, Inc. uses a discount rate of 17.5% its expected long-term sustainable growth rate is 1.5%. The net cash flows from operations of the company for the previous years are provided below.   Calculate the value of business of Lilac, Inc.

Accepted Answer

A)  $1,063,160 
B)  $1,215,040 
C)  $1,328,950 
D)  $1,090,420 
A)  $1,063,160 
B)  $1,215,040 
C)  $1,328,950 
D)  $1,090,420

Question 6

Which of the following valuation approaches employs the time value of money?

Accepted Answer

A)  asset approach 
B)  liabilities approach 
C)  market approach 
D)  income approach 
A)  asset approach 
B)  liabilities approach 
C)  market approach 
D)  income approach

Question 7

Which of the following is a difference between a forecast and a projection?

Accepted Answer

A)  A forecast reflects conditions that may occur, whereas a projection reflects expected conditions based on current knowledge of trends in relevant factors. 
B)  A forecast is typically for a short period, whereas projections can be made several years into the future projection. 
C)  A forecast is based on hypothetical assumptions, whereas a projection is based on current knowledge of trends. 
D)  A forecast invites rebuttal arguments of speculation and bias, whereas a projection is deemed to be the most appropriate indicator of expected future benefits. 
A)  A forecast reflects conditions that may occur, whereas a projection reflects expected conditions based on current knowledge of trends in relevant factors. 
B)  A forecast is typically for a short period, whereas projections can be made several years into the future projection. 
C)  A forecast is based on hypothetical assumptions, whereas a projection is based on current knowledge of trends. 
D)  A forecast invites rebuttal arguments of speculation and bias, whereas a projection is deemed to be the most appropriate indicator of expected future benefits.

Question 8

Fair market value proposes an actual sale price for cash.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following methods is used under the income approach of business valuation?

Accepted Answer

A)  net asset value method 
B)  capitalization of earnings method 
C)  dividend payout method 
D)  guideline transaction method 
A)  net asset value method 
B)  capitalization of earnings method 
C)  dividend payout method 
D)  guideline transaction method

Which of the following is true of investment value as a standard of valuation?

Explain the two methods that are commonly considered under the market approach of valuation of the company.

Which of the following gives the calculation of the capitalization rate?

Which of the following should be the first phase of analysis of information gathered for a business valuation engagement?

Lilac, Inc. uses a discount rate of 17.5% its expected long-term sustainable growth rate is 1.5%. The net cash flows from operations of the company for the previous years are provided below. Calculate the value of business of Lilac, Inc.

Which of the following valuation approaches employs the time value of money?

Which of the following is a difference between a forecast and a projection?

Fair market value proposes an actual sale price for cash.

Which of the following methods is used under the income approach of business valuation?

Introduction to the World of Forensic Accounting

The Legal Environment of Forensic Accounting

Screening and Staging Engagements

Gathering Evidence Interviews and Observations

Financial Statements Analysis Reading Between the Lines

Fraud and White-Collar Crime

Conducting a Fraud Investigation

Transforming Data Into Evidence Part 1

Transforming Data Into Evidence Part 2

Professional Responsibilities

Special Topics

Filters

Exam 11: Fundamentals of Business Valuation

Which of the following is true of investment value as a standard of valuation?

Explain the two methods that are commonly considered under the market approach of valuation of the company.

Which of the following gives the calculation of the capitalization rate?

Which of the following should be the first phase of analysis of information gathered for a business valuation engagement?

Lilac, Inc. uses a discount rate of 17.5% its expected long-term sustainable growth rate is 1.5%. The net cash flows from operations of the company for the previous years are provided below. Calculate the value of business of Lilac, Inc.

Which of the following valuation approaches employs the time value of money?

Which of the following is a difference between a forecast and a projection?

Fair market value proposes an actual sale price for cash.

Which of the following methods is used under the income approach of business valuation?

Introduction to the World of Forensic Accounting

The Legal Environment of Forensic Accounting

Screening and Staging Engagements

Gathering Evidence Interviews and Observations

Financial Statements Analysis Reading Between the Lines

Fraud and White-Collar Crime

Conducting a Fraud Investigation

Transforming Data Into Evidence Part 1

Transforming Data Into Evidence Part 2

Professional Responsibilities

Special Topics

Filters