Setting a Value for a Business by Using a "Price

question 23

Multiple Choice

Setting a value for a business by using a "price multiplier" is:

• A) a discounted cash flow approach.
• B) a balance sheet approach.
• C) a rule of thumb approach.
• D) a liquidation value approach.

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Definitions:

Current Costs

The cost associated with purchasing goods or services in the present time, often used in accounting to refer to the cost of inventory or services consumed.

Weighted Average Method

An inventory costing method that assigns a cost to inventory items based on the weighted average cost of all similar items purchased or produced during a period.

Inventory Items

Goods or materials that a company holds for the ultimate goal of resale or production.

Costing Method

An accounting approach to evaluate and determine the cost of goods sold and ending inventory.