CFA Practice Question

There are 201 practice questions for this study session.

CFA Practice Question

Which statement(s) is (are) true? The asset-based approach:

I. may be appropriate for companies that are worth more in liquidation than as a going concern.
II. cannot be used to value intangible assets.
Correct Answer: I and II

I. In this case the assets should be redeployed to higher valued uses.

II. The value of a company's intangible assets, such as goodwill, is generally impossible to determine apart from the company's overall enterprise value. For this reason, the asset-based approach is not the most probative method of determining the value of going business concerns.

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