Which of the Following Is the Best Statement of the Valuation

question 117

Multiple Choice

Which of the following is the best statement of the Valuation Principle?

• A)It is not possible to compare costs and benefits that occur at different points in time,in different currencies,or with different risks.
• B)The value of a commodity or an asset to the firm or its investors is determined by its competitive market price.When the value of the benefits exceeds the value of the costs in terms of market prices,the decision will increase the market value of the firm.
• C)The rate at which we can exchange money today for money in the future by borrowing or investing is the current market interest rate and is same across all banks.
• D)If equivalent goods or securities trade simultaneously in different markets across the world,they will trade for the same price.
• E)The value of a commodity or an asset is determined by assessing its use to the firm.

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Definitions:

Assets

Resources owned by a business or individual that have economic value and can be converted into cash.

Liabilities

Financial obligations or debts that an entity owes to another party, which must be settled over time through the transfer of economic benefits.

Net Worth

The total value of an individual's or entity's assets minus their liabilities.

Total Value

The aggregate worth of a good, service, product, or other item as perceived by its users.