MCQs on OVERVIEW OR VALUATION Part No. 3

Q.1:- If the value by combining two assets/business is more than aggregate of the two assets individually, then the combined value is known as

• Special Value
• Esteem Value
• Synergistic Value
• Investment Value

Q.2:- Investment value of the assets may be equal to its

• Market value or fair market value
• Market value
• Market value or book value
• Fair Market value

Q.3:- A..................describes the circumstance of how and assets or liability is used ;

• Liquidation Value
• Premise of value
• Going concern value
• All of the above

Q.4:- Premises of value includes:

• Current use and existing use
• Orderly liquidation
• Highest and best use
• All of the above

Q.5:- Which of the following is not included in board category of purpose of valuation:

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

Q.6:- As is where is basis is a premise of the value which:

• Will consider that the business enterprise that is expected to continue to operate in the future
• Would maximize the value of the asset or the group of assets within which the asset would he used
• Will consider the existing use of the asset which may or may not be its highest and best use
• All of the above

Q.7:- Which of the following is example of strategic decision making purpose of valuation:

• Restructuring valuation advice for mergers, demergers and spinoffs
• Strategic value analyses for fund mobilization, acquisitions, divestitures and joint ventures
• None of the above
• Both a and b

Q.8:- _______is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis:

• Security Market
• Financial Market
• Active Market
• Regular Market

Q.9:- Which method values the asset by discounting the cash flows expected to be generated by the asset for the explicit forecast period and also the perpetuity value (or terminal value) in case of assets with indefinite life?

• Discounted Cash Flow.(DCF) Method
• With and Without Method
• Guideline Public Company Method
• Depreciated Replacement Cost Method

Q.10:- Valuation engagement should include:

• Terms of Engagement
• Key assumptions and Source of Information
• Scope and Intended Users
• All of the above

Q.11:- The scope of work____be established and agreed between parties to a valuation assignment to the valuer beginning work:

• Should
• May
• Any
• Must

Q.12:- Intrinsic value is measured as the..................of future cash flows from ah asset or company by using an appropriate discount rate:

• Investment value
• present value
• Actual value
• Future value

Q.13:- IVS 102 deal with....:

• Investigations and Compliance
• Bases of value
• Scope of work
• Reporting

Q.14:- What is the most important use of historical financial data?

• To assist in supporting anticipated performance
• To determine average profits
• To determine how the company has performed
• To highlight profitability

Q.15:- Scrap value is also known as:

• Break-up value
• Salvage value
• None of the a and b
• Both a and b

Q.16:- ____is an important basis in financial reporting.

• Investment value
• Fair value
• Liquidation value
• Intrinsic value

Q.17:- ..............................describes the value of a groups of assets that could be realized in a liquidation sale, given a reasonable period of time to find a purchaser, with the seller being compelled to sale on an as-is where-is basis:

• Orderly Liquidation
• Normal sale
• Forced sale
• All of the above

Q.18:- The intangible elements of Going Concern Value include:

• An operational plant
• The necessary licenses
• Trained work force
• All of the above

Q.19:- ____is the value of the business attributable to equity shareholders:

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

Q.20:- ____involves valuing an asset based on transaction multiples derive from prices paid in transactions of assets to be valued /market comparable {comparable transactions):

• Comparable Transaction Multiple Method
• Relief from Royalty (RFR) Method
• Replacement Cost Method
• Comparable Companies Multiple Method

Q.21:- It is the duty of the______to clearly communicate the scope of engagement to the....................:

• Management, Valuer
• Client, Valuer
• Valuer, Client
• None of the above

Q.22:- Which of the following key element will decide what information can be considered in valuation?

• Engagement letter
• Scope of work
• Valuation date
• Valuation place

Q.23:- …………………….of an asset is the price at which willing seller and buyer are willing to execute the deal provided both the parties are unrelated, are having full knowledge of the circumstance surrounding the transaction, is under no compulsion to sell/buy and all rights/benefits which are inherent to the item are included in the transfer:

• Fair Market Value
• Fair Value
• Market Value
• Arm Length Price

Q.24:- External environment consists of:

• Product differentiation
• Customer bargaining position
• Competition in the industry,
• All of the above

Q.25:- Valuation report should not include:

• Date of appointment, valuation date and date of report
• Inspection and/or investigation undertaken
• Disclosure of valuer interest
• None of the above

Q.26:- The form and content of the valuation report depends on the:

• Purpose of the valuation
• Specifics of the engagement –
• Nature of the engagement
• All of the above

Q.27:- The valuer may maintain documentation in:

• Electronic format
• Either physical or electronic format
• Physical format
• None of the above

Q.28:- Which of the following method, you would consider appropriate while valuing the intangible assets?

• relative
• exclusive
• Multiple
• consistent

Q.29:- The methodology adopted for enterprise valuation is based on:

• Transaction multiple
• Discounted cash flow
• Relative valuation
• Any of the above

Q.30:- Relative valuation means

• How comparable assets are priced by the market
• How similar assets are priced in the market
• None of the above
• Any of the above

Q.31:- IVS 103 Ideal with

• Reporting
• Bases of value
• Investigations and Compliance
• Scope of work

Q.32:- Which of the following is implied presumption by the user of the valuation report?

• Valuer is independent of the client for whom the valuation is being done
• Valuer is independent of another specific party identified at the time of engagement usi the valuation report
• Valuer is independent of the asset to be valued
• All of the above

Q.33:- To provide useful information, the valuation report must set out following:

• Its purpose and intended use and disclosure of any assumptions, special assumptions
• Significant uncertainty or limiting conditions that directly affect the valuation.'
• Clear and accurate description of the scope of the assignment
• All of the above

Q.34:- Which of the following is most commonly used model for calculation of value

• income based approach
• Market Based Approach
• Asset Based approach
• All of the above

Q.35:- Fair value is almost similar to FMV but there are certain adjustments made to the to arrive at a………………………to all the dissenting stakeholders:

• Fair market value and Fair Value
• Market value and Fair Value
• Fair value and Fair Market Value
• Market value and Fair Market Value

Q.36:- The key elements of a valuation exercise are:

• Valuation date
• The parties to the transaction
• An actual, possible transaction
• All of the above

Q.37:- If the valuer needs to seek material assistance from others in relation to any aspect of the assignment the nature of such assistance and the extent of reliance be made clear:

• Any
• Must
• May
• Should

Q.38:- ____is the amount that will be realized on sale of an asset or a group of assets when an actual/hypothetical termination of the business is contemplated/assumed:

• Forced transaction value
• Orderly transaction value
• Liquidation Value
• Going Concern Value

Q.39:- Comparable Companies Multiple Method is also known as:

• Depreciated Replacement Cost Method
• Guideline Public Company Method
• With and Without Method
• Guideline Transaction Method

Q.40:- Legal, dispute and tax issues, valuation of claims, fairness opinions are example of which of the following type of purpose of valuation:

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

Q.41:- ...................................... is the act or process of determining the value of a business enterprise or ownership interest therein:

• Business Valuation
• Audit
• Review
• Due diligence

Q.42:- The fundamental value of the asset to company or a security

• Book value
• Intrinsic value
• Scrape value
• Fair value

Q.43:- ___ is an important measurement basis in financial reporting:

• Fair value
• Intrinsic value
• Investment value
• Scrap value

Q.44:- ____ is the price of companies tangible assets if it is goes put of the business and need to be liquidated with in limited period of time:

• Investment value
• Replacement value
• Liquidation value
• Fundamental value

Q.45:- _____is used to determine ad valorem

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

Q.46:- Intrinsic value is the actual value of company based on _____ analysis of qualitative and quantitative factor and does not consider the Market value in any manner, it is measured as the present rate value of future cash [lows from an asset or company by using an appropriate discount

• Actual
• Industry
• Market
• Fundamental

Q.47:- _____is the amount of money spent to purchase any goods or services:

• Cost
• Price
• Satisfaction
• Value

Q.48:- _____is the worth derived by any user by consuming a good or service:

• Cost
• Satisfaction
• Value
• Price

Q.49:- Assessed value is used to determine:

• To levy damage on the order of a court
• Ad valorem tax.
• None of the above
• Both (a) and (b)

Q.50:- While calculating liquidation value ............ are not included:

• Intangible assets
• Current assets
• Tangible assets
• Other assets