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1. Asset has been defined by the industry as transactions that would yield future economic benefits as a result of past transactions. 2. Brown field investment is the term used to describe businesses that are starting from scratch. 3. Enterprise-wide Risk Management allows the company to increase performance variability.

1. Asset has been defined by the industry as transactions that would yield future economic benefits as a result of past transactions. 2. Brown field investment is the term used to describe businesses that are starting from scratch. 3. Enterprise-wide Risk Management allows the company to increase performance variability.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Can you please answere all the following true/false statements. 

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0.70 4G1 45 4G i 7:54 4G VA KB/s pdf-valuation-and-.ssed_compress.pdf - Read-only ビy UIC StaTETIemL TCoNSIStent witTUe tran. SWER STATEMENT 1. Asset has been defined by the industry as transactions that would yield future economic benefits as a result of past transactions. 2. Brown field investment is the term used to describe businesses that are starting from scratch. 3. Enterprise-wide Risk Management allows the company to increase performance variability. 4. Risk identification is important to allow investors to assess impact of the risk to their investment. 5. Brown field investments are easier to evaluate as information is already available from prior years 6. Book value is the term used to describe the value derived from the amounts reflected in the financial statements. 7. Borrowings that are contracted to be paid after 24 months is classified as current liabilities. 8. Equipment is classified as non-current assets. 9. To get book value per share, total liabilities is deducted from total assets and the resulting figure is divided by total authorized shares. 10. Book value method is a transparent approach since value can be easily verified by looking at the financial statements. 11. Replacement cost is the cost of similar assets that have the nearest equivalent value as of the valuation date. 12. Replacement value is affected by asset age, size and its competitive advantage. 13. Insurance companies use replacement value as basis to determine the appropriate insurance premium to be charged to their clients. 14. For real properties, it is more important to look at the age of the asset than its size. 15. Replacement value method is superior to book value as it gives an indication of true value of the firm as of the valuation date. 16. Replacement value is an estimate of cost of reproducing, creating, developing or manufacturing a similar asset 17. If there is no comparable assets found in the market, it is more appropriate to use reproduction value method. 42 VALUATION CONCEPTS AND METHODOLOGIES ANSWER STATEMENT 18. Reproduction value is used for business ventures that are using highly specialized equipment in their operations. 19. Reproduction value is easy to validate despite not having comparable assets in the industry. 20. Among the approaches, the book value method gives the most recent approximate of the company value. 45 of 218
Transcribed Image Text:0.70 4G1 45 4G i 7:54 4G VA KB/s pdf-valuation-and-.ssed_compress.pdf - Read-only ビy UIC StaTETIemL TCoNSIStent witTUe tran. SWER STATEMENT 1. Asset has been defined by the industry as transactions that would yield future economic benefits as a result of past transactions. 2. Brown field investment is the term used to describe businesses that are starting from scratch. 3. Enterprise-wide Risk Management allows the company to increase performance variability. 4. Risk identification is important to allow investors to assess impact of the risk to their investment. 5. Brown field investments are easier to evaluate as information is already available from prior years 6. Book value is the term used to describe the value derived from the amounts reflected in the financial statements. 7. Borrowings that are contracted to be paid after 24 months is classified as current liabilities. 8. Equipment is classified as non-current assets. 9. To get book value per share, total liabilities is deducted from total assets and the resulting figure is divided by total authorized shares. 10. Book value method is a transparent approach since value can be easily verified by looking at the financial statements. 11. Replacement cost is the cost of similar assets that have the nearest equivalent value as of the valuation date. 12. Replacement value is affected by asset age, size and its competitive advantage. 13. Insurance companies use replacement value as basis to determine the appropriate insurance premium to be charged to their clients. 14. For real properties, it is more important to look at the age of the asset than its size. 15. Replacement value method is superior to book value as it gives an indication of true value of the firm as of the valuation date. 16. Replacement value is an estimate of cost of reproducing, creating, developing or manufacturing a similar asset 17. If there is no comparable assets found in the market, it is more appropriate to use reproduction value method. 42 VALUATION CONCEPTS AND METHODOLOGIES ANSWER STATEMENT 18. Reproduction value is used for business ventures that are using highly specialized equipment in their operations. 19. Reproduction value is easy to validate despite not having comparable assets in the industry. 20. Among the approaches, the book value method gives the most recent approximate of the company value. 45 of 218
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