The Accounting Procedure Whereby Assets Are Revalued to Market Value

question 26

Multiple Choice

The accounting procedure whereby assets are revalued to market value basis on a daily basis is known as:

• A)FASB rule 62.
• B)market value accounting.
• C)marked-to-market.
• D)none of the above

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Definitions:

Present Value

The present value of a future amount of money or a series of future cash flows, discounted at a specific rate of return.

Internal Rate of Return

The discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Average Rate of Return

A monetary measurement for assessing an investment's profit efficiency, determined by dividing the yearly average profit by the cost of initial investment.