Online Access Free ABV Exam Questions

One of the most important tools for conducting a business valuation thoroughly and on a timely basis is a proper schedule. Most first-time, or in frequent, business valuation clients (and their attorneys) tend to underestimate the amount of lead time necessary for the appraiser to prepare a through and professional opinion. Scheduling problems often arise because:

• A.The client delays in committing to the project hoping that the valuation problem will go away.
• B.A major change in some aspect of assignment midway through the project
• C.The client is not having awareness regarding valuation standards and selection criteria
• D.Of some external pressures on the client

The most appropriate application of the excess earnings method is for the purpose of:

• A.Estimating the net asset value
• B.Quantifying the amount of access earnings
• C.Estimating a normalized level of economic earnings
• D.Allocating total value between tangible and intangible assets

Which theory states that the fair market value of an investment is equal to the present value of the future payments, discounted back to the current time at an appropriate discount rate?

• A.None of the above
• B.Investment
• C.Interest payment
• D.Valuation

is defined as the sum of cash and cash equivalents plus receivables (usually all current assets listed above inventory) divided by current liabilities. For most companies, the only other significant current asset is inventory- usually the slowest of the current assets is to be converted to cash.

• A.Quick (Acid-Test) ratio
• B.Current ratio
• C.Sales to Net Working Capital
• D.Inventory turnover ratio

The capital stock of a corporation, its net assets and its share of stock are entirely different
things... the value of one bears no fixed or necessary relation to the value of the other;
because:

• A.Putting capital in stocks is somewhat a risky investment
• B.Share holders are only concerned with dividends
• C.A share of common stock does not represent a share in the ownership of the assets of a business.
• D.Only the corporation itself holds to all its assets and liabilities ... A thirsty shareholder of brewery cannot walk into "his" company and demand that a case of beer be charged to his equity account