Reference no: EM132784248

True or False

Question 1. Value pertains to how much a particular object is worth to a particular set of eyes

Question 2. Methods to value for real estate can may be different on how to value an entire business

Question 3. Businesses treat capital as a scarce resource that they should compete to obtain and efficiently manage

Question 4. According to the CFA Institute, valuation is the estimation of an asset's value based on variables perceived to be related to future investment returns on comparisons with similar assets, or when relevant, on estimates of immediate liquidation proceeds

Question 5. Valuation includes the use of forecasts to come up with reasonable estimate of value of an entity's assets or its equity

Question 6. Valuation techniques may differ across different assets but all follows similar fundamental principles that drives the core of these approaches

Question 7. As valuation mostly deals with projections about future events analysis should hone their ability to balance and evaluation different assumptions used in each phase of the valuation exercise, assess validity of available empirical evidence and come up with rational choices that aligns with the ultimate objective of the valuation activity

Question 8. In the corporate setting the fundamental equation of value is grounded on the principle that Alfred Marshall popularized - a company creates value if and only if the return on capital invested exceed the cost of acquiring capital

Question 9. Value in the point of view of corporate shareholders, relates to the difference between cash inflows generated by an investment and the cost associated with the capital invested which captures both time value of money and risk premium

Question 10. Intrinsic value refers to the value of any asset based on the assumption assuming there is a hypothetically complete understanding of its investment characteristics