A Drawback to the Price-To-Cash-Flow Method of Valuation Is That

question 62

True/False

A drawback to the Price-to-Cash-Flow method of valuation is that there is no generally accepted cash flow measure.

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Definitions:

Unreliable

Lacking consistency, dependability, or accuracy in information, data, or result.

Cumulative Weighted Average Expenditures

The total cost of investments or expenditures over a period, weighted by the time each amount was invested or incurred, used in capital budgeting or to calculate interest during construction.

Useful Life

The estimated duration a fixed asset is expected to be economically useful to an organization.

Capitalized

Refers to recording an expense or cost as an asset on the balance sheet, rather than as an expense on the income statement, to spread out the expense over its useful life.