On What Occasion Is a Business Valuation Not Usually Essential

question 59

Multiple Choice

On what occasion is a business valuation not usually essential?

• A) when giving a gift of stock
• B) when going public
• C) when selling a business division
• D) when hiring a new director of operations

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Definitions:

Margin Of Safety

The difference between actual sales and sales at the break-even point. It measures the extent to which sales can decline before a business incurs a loss.

Variable Costs

Expenditures that adjust in relation to the business's output or operational intensity.

Fixed Expenses

Costs that do not fluctuate with the volume of sales or production levels, remaining constant even as business activities change.

Unit Selling Price

The price for which a single unit of a product is sold, excluding any discounts or allowances.