Question

What is the difference between book value and market value? Which should we use for decision-making...

What is the difference between book value and market value? Which should we use for decision-making purposes?
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Book value is the value of an asset as shown on a firm's balance sheet. It represents the historical cost of an asset rather than its current worth.

The market value of an asset is the observed value for the asset in the market place. This value is determined by supply and demand forces working together in the market place, where buyers and sellers negotiate a mutually acceptable price for the asset.

The market value should be used for all decision making purposes as it represent the current worth of an asset.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Describe the difference between market value and book value?
Describe the difference between market value and book value?
what is the difference between book value and fair value?
what is the difference between book value and fair value?
I have noticed that in many exercises when there is a difference between book value and...
I have noticed that in many exercises when there is a difference between book value and fair market value , we calculate the percentage of discount at first in order to calculate the depreciation expenses For example, let's think about a company which buys an asset from other company The book value of machine is 30.000 USD The fair value (after financial expert statement) is 35.000USD How can we calculate the depreciation expenses for 10 years (we assume salvage value...
Responsibility accounting can ultimately drive decision-making in an organization. Having said this, what is the difference...
Responsibility accounting can ultimately drive decision-making in an organization. Having said this, what is the difference between a centralized and decentralized organization structure? Which do you feel is better for effective decision-making? Why?
The purpose of marketing research is to improve marketing and business decision-making. We are going to...
The purpose of marketing research is to improve marketing and business decision-making. We are going to return to CC’s mobile application. Which gender is more likely to use the app? We administer a questionnaire to students that measures potential usage on a scale of 1–7 on the various features they will use (1 = never use and 7 = always use). “We gather some sample data and observe that the two groups have different average scores. But does this represent...
If there is a difference between the salvage and book value of an asset, there will...
If there is a difference between the salvage and book value of an asset, there will be a tax implication to the sale. Group of answer choices True False
The book states that the capital budgeting decision involves the planning of expenditures for a project...
The book states that the capital budgeting decision involves the planning of expenditures for a project with a life of at least one year and usually considerably longer. Figure 12-1 provides a flow chart of the decision-making process. The book quickly goes into the importance of cash flow. I have said it before and I'll probably say it again, cash is king. Cash flow is the backbone of a company and should be the center piece to decisions. What is...
What is Market Making? a) It transfers goods from low value use to high value use...
What is Market Making? a) It transfers goods from low value use to high value use hence wealth is created. b) Market making cannot take place if transaction costs are very high thereby to prevent value creating transactions. c) It brings high value buyers and low value sellers together. d) all of the above
Which is more useful for decision-making; variance or stamdatrd deviation? Why? What is the relationship between...
Which is more useful for decision-making; variance or stamdatrd deviation? Why? What is the relationship between the two?
Which of the following forms a part of decision making in CVP analysis? decision to advertise...
Which of the following forms a part of decision making in CVP analysis? decision to advertise selection of inventory method for financial reporting purposes decision to form a capital policy decision to improve the efficiency of the work force
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT