In the estimation of value process,which of the following are true concerning discontinued operations?
I.The earnings from discontinued operations are explicitly shown in the income statement.
II.The net asset position of discontinued operations is disclosed on the balance sheet.
III.For an outside analyst,the most recent book value usually serves as a good estimate of the value of discontinued operations.
IV.The value of discontinued operations should be modeled as part of free cash flow or included in the DCF value of operations.
A)I,II,and III only.
B)II and III only.
C)I and IV only.
D)I,II,III,and IV.

Question

Quizplus · Accepted Answer

I is true as earnings from discontinued operations are shown separately in the income statement. II is true as the net asset position of discontinued operations is disclosed on the balance sheet. III is true to some extent as the most recent book value can serve as a starting point, but other factors like market conditions, future cash flow projections, and potential demand should also be considered. IV is not always necessary, as the value of discontinued operation can be estimated using other valuation methods such as market comparables or precedent transactions. So, only statements I, II, and III are true, making option A the correct choice.

In the Estimation of Value Process,which of the Following Are