Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / A firm presents a market value balance sheet and a book value balance sheet to prospective investors

A firm presents a market value balance sheet and a book value balance sheet to prospective investors

Finance

A firm presents a market value balance sheet and a book value balance sheet to prospective investors. What is wrong with using the book value version of the balance sheet in making a decision to invest in the company?

  • A :

    The book value is based on comparative values.

  • B :

    The book value is too low compared to market values.

  • C :

    The book value is based on historical values.

  • D :

    The book value represents sample values used in the sheet.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

C :

The book value is based on historical values

Book value of all items on the balance sheet reflects the value of the items at the time they were "booked" in other words the purchase price, which may not reflect the current value of these items