Which of the Following Models Is Associated with Level 3

question 74

Multiple Choice

Which of the following models is associated with Level 3 in the FASB hierarchy for ascertaining fair value?

• A)Mark to market model.
• B)Replacement model.
• C)Mark to model.
• D)Historical cost model.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by summing the present values of all cash inflows and outflows associated with the investment.

Tax Credit

A direct reduction of the tax liability, not merely a reduction of taxable income.

Variable Cost

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production inputs, which vary with the level of output.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the amount of goods or services produced, such as rent or salaries.