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A Conservative Rule of Thumb for Measuring the Value of a Firm

question 96

True/False

A conservative rule of thumb for measuring the value of a firm is to establish a business' worth to be 10 times the firm's most current annual profit.


Definitions:

Supply And Demand

The economic model that determines the price of anything in a market, based on the quantity available and the desire of consumers for it.

Competitive Market

A market structure characterized by a large number of sellers and buyers where no single entity can control prices or market share.

Notebooks

Books with blank pages used for writing, drawing, or recording notes.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

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