Which One of These Values Best Represents the Funds Needed

question 78

Multiple Choice

Which one of these values best represents the funds needed to acquire a firm and payoff all of that firm's debt?

• A)Market value of total assets
• B)Book value of equity
• C)Return on assets
• D)Market value of equity
• E)Enterprise value

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Definitions:

Economic Profits

The disparity between total income and combined expenses, encompassing both out-of-pocket and hidden costs.

Economic Profits

The margin between an organization's complete earnings and its aggregate expenditures, covering both visible and hidden costs.

Implicit Costs

Implicit costs are the opportunity costs of using resources owned by the business for production instead of lending, selling, or renting them out.

Accounting Profits

The net income for a company determined by subtracting total expenses from total revenues, according to generally accepted accounting principles (GAAP).