MCQs on OVERVIEW OR VALUATION Part No. 1

Q.1:- ...........................means quantified Worth of one good or service expressed in term of the worth of another:

• Exchange value
• Replacement value
• Investment value
• Esteem value

Q.2:- To mitigate the bias in valuation, a valuer should adopt, which of the following suggestion

• Increase self awareness
• Delink valuation from reward/punishment
• Do not take any priorposition
• All the above

Q.3:- The..............................of a non-financial asset might provide maximum participants on a stand-alone basis:

• Liquidation Value
• Highest & Best Use
• Going concern value
• As is where is value

Q.4:- Highest and best use concept is most frequently applied to:

• Non-financial asset
• Financial asset
• None of a and b
• Both a and b

Q.5:- India Infrastructure limited is an Indian company registered under The Companies Act 2013 is required to have the valuation of its debenture as on the balance sheet date. This valuation is example of which of the following type of purpose of valuation:

• Regulatory requirement
• Financial reporting
• Strategic decision making
• None of the above .

Q.6:- .............................will consider the existing use of the asset which may or may not be its

• Highest and best use. As is where is basis,
• Control Premium, Discount for lack of marketability
• As is where is basis, highest and best use
• None of the above

Q.7:- The scope of valuation can cover:

• Part of an entity
• Any particular asset or liability
• An entity
• All of the above

Q.8:- The valuation exercise and selection of valuation bases depend on the following:

• Applicable standard of value
• Applicable premise of value
• Intended purpose of the valuation
• All of the above

Q.9:- Valuation report should include:

• Identity of valuer and any other expert
• Background information of the asset being valued
• Purpose of valuation and appointing authority
• All of the lore

Q.10:- Valuation record should include.

• All calculations
• investigations and analyses relevant to the final conclusion, and a copy of any draft or final report(s) provided to the client.
• The key inputs,
• All of the above

Q.11:- IVSC has issued 11 Valuation Standard which are includes:

• General Valuation Standard and 7 Assets specific valuation standard
• General Valuation Standard and 4 Assets specific valuation standard
• General Valuation Standard and 7 Assets specific valuation standard
• General Valuation Standard and 6 Assets specific valuation standard

Q.12:- Documentation shall be prepared at the time the valuation assignment is

• Finished
• Performed
• Completed
• Started

Q.13:- HABU stands for

• Higher and Better use
• High and Below Usage
• Highest and Best Use
• None of the above

Q.14:- Under liquidation value, what is the basis of determining the value:

• It is a forced transaction with a shortened marketing period because of the urgent need for funds
• It is based on an orderly transaction with a typical marketing period to dispose of all assets and liabilities
• None of a and b
• Both of a and b

Q.15:- Bases of value does not include:

• Investment Value
• Synergistic Value
• Equitable Value
• All of the above

Q.16:- ____will vary from person to person depend' on the opinion formed by the customer:

• Cost
• Satisfaction
• Value
• Price

Q.17:- ..............................is the value of business as per the audited financial statement:

• Assessed value
• Book value
• Fair value
• Market Value

Q.18:- Bases of value does not include:

• Liquidation value
• Actual Rent
• Market Value
• Market Rent

Q.19:- Bases of value does not include:

• Liquidation value
• Actual Rent
• Market Value
• Market Rent

Q.20:- The value determined by the government agencies to determine ad valorem taxes is called.......................:

• Assessed value
• Book value
• Scrap value
• Fair market value

Q.21:- In Actuarial Valuation, the assumption is based on.......................

• Probability of distribution
• Average Distribution
• Mix of statistical studies and experienced judgement
• Monte Carlo Distribution

Q.22:- In a forced liquidation:

• There is a lack of adequate time to find purchasers
• There is more often than not, fire sale values apply
• There is usually a sense of urgency
• All of the above

Q.23:- Which of the following is the purpose of valuation?

• Legal Matters
• Financial Reporting
• None of the above
• Both a and b

Q.24:- .............................is the value of the business attributable to all its shareholders:

• Business value
• Equity value
• Enterprise value
• All of the above

Q.25:- The Scope of Valuation can be:

• Limited Scope Valuation Engagement
• Calculation Engagement
• Valuation engagement
• All of the above

Q.26:- Which of the following are part of the valuation assignment's scope of work that must be communicated to all parties to the valuation assignment?

• The basis of value
• The extent and limits on the investigations and anv sources of information that may be relied upon
• The purpose of the valuation
• All of the above

Q.27:- Valuation base means the indication of the type of value being used in..............:

• Management Representation
• An engagement
• Scope of work
• A Valuation Report

Q.28:- Valuation base means the indication of the type of value being used in..............:

• Management Representation
• An engagement
• Scope of work
• A Valuation Report

Q.29:- Intrinsic value is measured as the present value of future cash flows from an asset or company by using an appropriate

• Discount factor
• Discount rate
• Market rate
• Fair Value

Q.30:- What are the characteristics of a business strategy?

• A means by which an entity achieves its desired ends
• A solution to the problems faced by the business
• If s the long-term business planning
• All of the above

Q.31:- Which of the following valuation methods would most likely not be used for business?

• Industry Price Earnings Ratio DCF
• Multi-period Excess Earning Method
• Discounted Cash Flow
• Net Assets Method

Q.32:- Which of the following are the principal qualitative characteristics of valuation report?

• Relevance
• Reliability
• Understandability
• All of the above

Q.33:- An asset is officially appraised and priced on -

• Valuation date
• Effective date
• Verification date
• Report date

Q.34:- A Valuer shall ensure that he maintains written contemporaneous records For any of the_____

• The reasons for taking the decision
• The information and evidence in support of such decision. ;
• Decision taken
• All of the above

Q.35:- Which of the following is part of the Documentation?

• Management/client representation letter or such communication received if any
• A copy of the signed valuation report issued
• None of the above
• Both a and b

Q.36:- Which of the following is part of the Documentation?

• Management/client representation letter or such communication received if any
• A copy of the signed valuation report issued
• None of the above
• Both a and b

Q.37:- The primary reason why ‘divestitures’ create value because

• Buyer is willing to pay more than the value that is to be extracted by the divesting company
• Good in the short run as well as in the long run
• None of the above
• All the above

Q.38:- Principal methods of Valuation are:

• Discounted cash flow method, Net assets method, Market price method
• Asset approach, Income approach, discounted cash flow method
• Market approach, Asset approach, Income approach
• Market approach, discounted cash flow method, Asset approach

Q.39:- Intrinsic value is the _____ of company based on fundamental analysis of qualitative quantitative factor and does not consider the Market value in any manner. It Is measured as present value of future cash flows from an asset or company by using an appropriate disco rate:

• AIMS length price
• Synergistic Value
• Actual Value
• Fair value

Q.40:- A Premise of value or Assumed Use describes the circumstances of how an asset or liability is

• Determined
• Valued
• Used
• None

Q.41:- Any reference to the term asset also includes

• Expenses
• Liability
• Income
• All of the above

Q.42:- The highest and best use is the use of a................by market participants that would maximize the value of the asset or the group of assets within which the asset would be used:

• Non-financial asset
• Financial Assets
• None of the above
• Both a and b

Q.43:- Which of the following is are key element to be considered while selecting Valuation base?

• Term of engagement
• Purpose of engagement
• Both A and B
• Financial status of the organization

Q.44:- Valuation reports must be having which of the following features:

• Neutral, i.e. free from bias
• Complete in all material respects.
• Represent faithfully the information contained therein
• All of the above

Q.45:- Some common Assumed used are:

• current use/existing use
• Orderly liquidation
• highest and best use
• All of the above

Q.46:- Documentation includes:

• Relevant evidence obtained
• Conclusions that the valuer has reached
• The record of valuation procedures performed
• All of the above.

Q.47:- To mitigate the bias in valuation, a valuer should adopt, which of the following suggestion

• Increase self awareness
• Delink valuation from reward/punishment
• Do not take any prior position
• All of the above

Q.48:- What is the object of the valuation report?

• To provide fair value of the subject
• To present the result of findings of a comprehensive appraisal of and revealing a user speitems.
• To provide value of the subject
• To provide market value of the subject

Q.49:- Fair Market Value considers price in an ............ while Fair Value considers only the Principal or active market of that commodity:

• Open and restricted Market
• Open and unrestricted Market
• Closed and unrestricted Market
• Open and unrestricted Market

Q.50:- An attitude of ................. means the valuer makes a critical assessment, with a questionnaire in his mind, of the validity of information, obtained and is alert to information that contradicts and brings into question the reliability of documents or representations by the responsible party:

• Professional Judgement
• Professional Expert
• Professional skepticism
• Professional Prudence