Which of the Following Is NOT a Disadvantage of Current

question 1

Multiple Choice

Which of the following is NOT a disadvantage of current exit value accounting;

• A)it fails to follow the going concern convention.
• B)it considered to be subjective.
• C)it only focusses on long- run operational effectiveness.
• D)it fails to give useful information about internal usefulness of assets.

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Definitions:

Discounted Free Cash Flow

A valuation method estimating the attractiveness of an investment opportunity by discounting projected free cash flows.

Average Cost

A method to determine the cost basis of investments by averaging the purchase price of all the shares.

Capital

Funds or resources that individuals or businesses use to invest in assets or operations with the goal of generating income or profit.

Free Cash Flow Valuation Approach

A method of valuing a business by estimating the cash that can be generated after accounting for capital outlays necessary to maintain or expand the asset base.