If Cash Flow Is Deemed to Be the Most Important

question 20

Multiple Choice

If cash flow is deemed to be the most important consideration in buying a business, which of the following valuation methods is likely to be used?

• A)adjusted tangible assets
• B)price/earnings
• C)high equity/low debt
• D)discounted future earnings

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Definitions:

Alternatives

Different options or choices available in a given situation, allowing for a range of outcomes based on different decisions.

Performance Opportunity

A chance for employees to demonstrate their abilities and contribute to organizational goals, often linked with rewards or recognition.

Less Than Desired

A situation or outcome that falls short of what was hoped for or expected.

Actual Performance

The real results achieved by an individual, team, or organization as compared to the goals or standards set.