The book value of a business may or may not represent its fair market value.

Question

Quizplus · Accepted Answer

The book value of a business is based on its historical costs and may not reflect its current market value, which is influenced by various factors like economic conditions, industry trends, competitive landscape, and growth potential. Therefore, the fair market value of a business may be higher or lower than its book value, depending on the market dynamics and investors' perceptions.

The Book Value of a Business May or May Not