Net Present Value (NPV)method Has Been Considered as an Alternative

question 54

Multiple Choice

Net present value (NPV) method has been considered as an alternative valuation technique to historical cost for biological assets.The NPV method may be described as:

• A) An accounting method for projecting the revenues and expenses associated with an asset or entity.
• B) An economic concept based on the notion that an asset's value can be determined from its future cash flows.
• C) An accounting concept based on the statement of cash flows to determine the present value of investments.
• D) A finance technique for testing the efficiency of the market by comparing share prices to the discounted cash inflows associated with the asset.
• E) None of the given answers.

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Definitions:

Supply Curves

Graphs showing the relationship between the price of a good and the quantity of that good a supplier is willing to offer for sale, holding all else constant.

World Price

The international market price of a good or service, influenced by global supply and demand.

Domestic Demand

The aggregate need for products and services inside a nation.

Supply Curves

Graphical representations showing the relationship between the price of a good and the quantity of that good a seller is willing to supply.