Under the Capitalized Earnings Approach to Valuing an Existing Business

question 91

True/False

Under the capitalized earnings approach to valuing an existing business, most normal-risk businesses use a rate-of-return factor ranging from 20 to 25 percent.

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Definitions:

Unconscious Processes

Mental activities beyond conscious awareness that influence thoughts, feelings, and behaviors.

Projective Measures

Personality tests that examine unconscious processes by having people interpret ambiguous stimuli.

Reticular Activating System

A network of neurons located in the brainstem that is crucial for regulating wakefulness and sleep-wake transitions.

Biological Explanations

Explores the physiological and genetic underpinnings of behavior and mental processes.