Question 1

____________ is perhaps the most difficult task for the business appraiser.

Options :

A : Getting two or more parties with different economic and business expectations to agree on projected future benefits and the risks associated with achieving those projections.

B : Identification of partial interest.

C : Selection of enterprise value premise.

D : Estimation of invested capital

Answer: A

Question 2

The FASB says that, for ''unobservable inputs,'' the valuation should include market participant assumptions about risk, even if this adjustment is different to determine. Interestingly, it breaks risk into following categories EXCEPT:

Options :

A : The risk inherent in a particular valuation technique

B : The risk inherent in inputs of the valuation technique

C : The explicit risk related to a particular valuation technique

D : The implicit risk related to a particular valuation technique

Answer: C,D

Question 3

Since the use of the extraordinary designation is so restrictive, obviously many items do not meet the strict definition for accounting purposes but nevertheless should be regarded as nonrecurring for analytical purposes. Some examples of such items would be all of the following EXCEPT:

Options :

A : Gains or losses on the sale of assets

B : Gains or losses on disposition of a segment of the business

C : Write-offs and other expenses related to an acquisition

D : Effects of normal price fluctuations

Answer: D

Question 4

___________ may apply to publicly traded stock where the size of the block is large enough relative to normal trading volume that it could not be sold in a short time without depressing the market price.

Options :

A : Discounts for lack of control

B : Blockage discounts

C : Discounts for lack of marketability

D : Contingent liability discounts

Answer: B

Question 5

The discount rate is a market-driven rate. It represents the expected yield rate-or rate of return-necessary to induce:

Options :

A : Investors to commit available funds to the subject investment, given its level of risk

B : Yield rate

C : Dividends

D : Investment yield

Answer: A

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