[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Anonymous]

Joe CPA has just accepted a business valuation engagement for The Charter Company, a small business. Some of the facts related to this company are as follows:

The company has been in existence for 25 years.

For the last 3 years, the company has shown little, if any, profit.

The owner has recently had some difficulty making expected loan principal repayments.

The owner met with a credit counselor last month and is in the process of making some recommended changes.

As a beginning step in the valuation process, Joe has determined the premise of value to be:

A.

liquidation.

B.

bankruptcy.

C.

reorganization.

D.

a going concern

[ShmeePA]

A?

BEC-84
FAR-86
AUD-87
REG-79

[h0wdyus]

I forgot the to multiply the RHS by 500

500xs -990000 = .15 (500 x s)

s = 2329

FAR - 81 29th Aug 2013
AUD - 84
REG - 82
BEC - 89 29th Aug 2014
Using Yager

FROM NJ

[h0wdyus]

C

FAR - 81 29th Aug 2013
AUD - 84
REG - 82
BEC - 89 29th Aug 2014
Using Yager

FROM NJ

[Anonymous]

The correct answer is D as per NINJA MCQ.

This question proves the randomness of some questions on this test.

[ShmeePA]

D was my initial choice but I simply ruled t out because I have not once seen the term going concern in BEC.

BEC-84
FAR-86
AUD-87
REG-79

[h0wdyus]

Is there an explanation to the answer in ninja

FAR - 81 29th Aug 2013
AUD - 84
REG - 82
BEC - 89 29th Aug 2014
Using Yager

FROM NJ

[Zackrampage]

Congrats CPAin14! Have my test this Thursday, nervous ahh

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[RandomAlt]

Wow…it died in here.Well,I'm home, and working in the Wiley book. I've exhausted questions from CPAexcel.

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[TigerWoods]

Getting burnt out. Come on exam day

[RandomAlt]

@stoleway … If you are still around, thank you. Today I went back to a long equivalent unit example a couple of pages back in this study group. Your explanation of the example was fantastic. I used to it reverse engineer how to work the problems.

@TigerWoods … LOL, we all are. I just started from the front of the WIley book and I'm gonna work as far to the back as I can…but I'm severely starting to lack motivation. And my test is Sunday!

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[EYNewHire]

@TigerWoods You aren't the only one. My plan was to get through about a third of B6 and finish the rest of B5. I'm just finishing B5 now. It's gonna be a long night.

[EYNewHire]

An increase in the minimum wage:

I. Will move employers down the labor demand curve, causing the quantity of labor demanded to fall.

II. Is likely to increase the supply of labor, as more people will be willing to work for the higher wage.

A) Both I and II correct.

B) Neither I and II correct

C) Only I correct

D) Only II correct

[RandomAlt]

A

Edit … or C 😉

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[EYNewHire]

That's what I thought as well. It's actually B. 1 is incorrect because you go up the demand curve not down. 2 is wrong because the quantity supplied increases not supply itself.

[Author]

Replies