The _____ methods define utility as being the net cash inflows that the asset will produce.
A) residual income valuation
B) discounted cash flow valuation
C) inventory valuation
D) pre-money valuation

Question

Quizplus · Accepted Answer

The discounted cash flow (DCF) valuation method defines utility as the net cash inflows that the asset will produce. Residual income valuation also takes into account the net income from an asset, but it subtracts a required return on the assets equity to determine the value. Inventory valuation and pre-money valuation methods do not consider net cash inflows as a defining factor of utility.

The _____ Methods Define Utility as Being the Net Cash