The ______ Approach to Determining a Company's Worth Involves the Cost

question 26

Multiple Choice

The ______ approach to determining a company's worth involves the cost to recreate the operating assets of the business.

• A) asset-based
• B) income
• C) market
• D) liability-based

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Definitions:

Spontaneous Financing

Financing provided by current liabilities that arise automatically as a result of doing business.

Accounts Payable

Short-term liabilities a company owes to its creditors or suppliers, expected to be settled within one year.

Bank Loan

A sum of money borrowed from a bank that needs to be repaid with interest.

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.