Which of the Following Valuation Methods Does Not Consider the Future

question 113

Multiple Choice

Which of the following valuation methods does not consider the future income-earning potential of a business?

• A)Balance sheet technique
• B)Excess-earnings method
• C)Discounted future earnings approach
• D)Market approach

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Definitions:

Performance Management

A systematic process by which an organization involves its employees in improving organizational effectiveness in the accomplishment of the organization's mission and goals.

Balanced Scorecard

A strategic planning and management system used by organizations to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor performance against strategic goals.

Four Perspectives

Refers to a framework often used in business and management to evaluate an organization from multiple angles, commonly including financial, customer, internal processes, and learning and growth aspects.

Effectiveness

The degree to which an organization, such as a nonprofit, achieves its stated objectives and goals efficiently.