________ is performed by taking the earnings (net profit)of an organization; subtracting or adding any unusual items that the lender or investor believes are not customary, normal, or usual items; and dividing that figure by a capitalization rate.
A)Price/earnings valuation
B)Capitalization of excess earnings method
C)Discounted future net cash flow
D)Capitalization of earnings valuation

Question

Quizplus · Accepted Answer

The given description specifically matches with the capitalization of earnings valuation method. This method involves using the net profit of a company along with adjustments for unusual items, and dividing the resulting figure by a capitalization rate to arrive at the company's value.

________ Is Performed by Taking the Earnings (Net Profit)of an Organization;