Which of the Following Explains the Rationale for Using "Normalized

question 19

Multiple Choice

Which of the following explains the rationale for using "normalized" earnings under the excess-earnings valuation approach?

• A) Historic asset values are the best reflection of the assets' value in use.
• B) The company's future earnings should always be higher than the past earnings.
• C) The past often provides useful information about the future; past earnings are a good starting point.
• D) Normalized earnings are not used under the excess-earnings valuation approach.

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Definitions:

Sincere Apology

An honest expression of regret for wrongdoing, aiming to mend relationships and accept responsibility for actions.

Recommendation

A suggestion or advice given based on analysis or expertise, aimed at guiding decisions or actions.

Routine Message

Everyday or regularly occurring communication that conveys standard information in business or personal contexts.

Routine Business Requests

Ordinary or regular solicitations or inquiries made in the course of business operations, often involving standard transactions or information gathering.