Which of the Following Would Likely Be the Most Useful

question 46

Multiple Choice

Which of the following would likely be the most useful when valuing a dot.com company?

• A) Net asset value
• B) Dividend yield
• C) Discounted cash flow
• D) Price-earnings

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Definitions:

Total Fixed Cost

The sum of all costs required to produce any product or service, which remain unchanged regardless of the company's level of production or output.

Average Variable Cost

The cost that varies with the level of output, divided by the total quantity of output produced, reflecting the average cost per unit of variable expenses.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, indicating the cost per unit.

Average Total Cost

The total of all costs (fixed and variable) divided by the total output produced, representing the per-unit cost on average.