The relevant measure of the value of the assets of a company that is going out of business is the:
A)liquidating value.
B)inflation-adjusted book value.
C)historical cost.
D)book value.

Question

Quizplus · Accepted Answer

Liquidating value represents the amount of money that the company will receive for its assets when they are sold in a liquidation sale. This measure takes into account the current market value of the assets, rather than their historical cost or book value, which may be outdated or inaccurate. Therefore, in the case of a company going out of business, the relevant measure of the value of its assets is the liquidating value.

The Relevant Measure of the Value of the Assets of a Company