If Noncash Consideration Such as Stock of a Publicly-Traded Company

question 17

Multiple Choice

If noncash consideration such as stock of a publicly-traded company is given in a revenue contract,then the value to be used for the transaction price should be ________.

• A)fair market value
• B)book value
• C)historical cost
• D)net present value

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Definitions:

Investment Decisions

The process of choosing which assets or projects to invest in, with the aim of maximizing returns or value over time.

Uncertainty

A condition characterized by a lack of comprehensive information, making it unfeasible to precisely portray the current situation, predict future events, or identify multiple potential results.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a relevant resource or factor of production.

Rental Cost

The expense incurred from hiring or leasing a property or equipment.