Assume the same information as in assignment one. Argue why (a) replacement value might be the correct value to use in the financial statements, (b) why the DCF value might be the correct value to use in the financial statements, (c) why the book value might be the correct value to use in the financial statements, (d) why fair market value might be the correct value to use in the financial statements, and (e) under what circumstances would management prefer each alternative? Note that I am not asking you to pick the correct method from a regulatory perspective. Rather, you are to argue the merits of each alternative. As always, support your argument.

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a Replacement Value Argument Replacement value represents the cost of replacing an asset with a similar one in the current market It might be the corr... View the full answer