The Net Worth of a Firm

question 91

Multiple Choice

The net worth of a firm

• A) is usually the same as the firm's market value.
• B) is based on current asset costs.
• C) is based on current assets less current liabilities.
• D) None of the options

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Definitions:

WACC

The method known as Weighted Average Cost of Capital assesses a firm's cost of capital, with a proportional weighting applied to each segment of capital.

Net Investment Cost

The total cost associated with making an investment after subtracting any incentives or credits.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on the income or profits generated.

CCA Method

The CCA (Capital Cost Allowance) method is a tax deduction approach allowing Canadian businesses to claim depreciation on tangible property over its useful life as part of calculating taxable income.