Which Statement Best Characterizes Business Valuation

question 62

Multiple Choice

Which statement best characterizes business valuation?

• A)Valuation is almost a perfect science.
• B)Since there are so many intangibles,valuation is mostly an art.
• C)The buyer determines the value of a business.
• D)Negotiation skills play an important part in valuation.

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Definitions:

Personal Assets

Assets owned by an individual, including both tangible items like real estate and cars, and intangible items like investments and patents.

Income and Loss Sharing

A method often used in partnership agreements where profits and losses are distributed among partners according to pre-agreed proportions.

Creditors' Claims

Rights of lenders to claim assets of a debtor in case of default.

Income and Loss Ratio

Usually referred to as the "loss ratio" in insurance, it is a metric that compares losses (claims paid and adjustment expenses) to premiums earned.