The Estimate of a Firm's Value at the End of the Forecast

question 69

Multiple Choice

The estimate of a firm's value at the end of the forecast horizon using a valuation multiple is also called its ________.

• A) fixed value
• B) payback value
• C) terminal value
• D) none of the above

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Definitions:

Working Capital

The amount by which current assets exceed current liabilities, indicating the liquidity level available to a business for day-to-day operations.

Salvage Value

The calculated resale value an asset holds once it ceases to be useful.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life.

Simple Rate Of Return

A financial metric that calculates the increase in profits or savings expected from an investment as a percentage of the initial investment cost.