The market value of a firm's fixed assets:
A)must exceed the book value of those assets.
B)is more predictable than the book value of those assets.
C)in addition to the firm's net working capital reflects the true value of a firm.
D)is decreased annually by the depreciation expense.
E)is equal to the estimated current cash value of those assets.

Question

Quizplus · Accepted Answer

The market value of a firm's fixed assets is equal to the estimated current cash value of those assets. This may be different from the book value of the assets, which reflects depreciation and other accounting factors. The market value is more volatile than the book value and may fluctuate based on changes in market conditions and the asset's perceived usefulness. The market value of fixed assets is one component of a firm's total value, along with net working capital, goodwill, and other intangible assets.

The Market Value of a Firm's Fixed Assets