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:

Immediate Response System

A technology or service designed to provide instant feedback or reaction to input or inquiries, commonly used in customer service and educational settings.

Total Logistics Cost

The overall expenses associated with the logistics functions of a company, including transportation, warehousing, inventory management, order processing, and administration.

Stockouts

A situation in retail or inventory management when a product is not available for sale or supply.

Return Products Handling

The process of managing the return of products from customers, including refunds, repairs, or exchanges.