Question: TRUE OR FALSE : A )To calculate fair value using the capitalized earnings method: Income/Capitalization rate = FAIR VALUE (True or False) B) The probability-weighted

TRUE OR FALSE :

A )To calculate fair value using the capitalized earnings method: Income/Capitalization rate = FAIR VALUE

(True or False)

B) The probability-weighted expected return method (PWERM) calculates an expected (weighted average) terminal value based on the probability and payoff of different liquidity events (ex. liquidation, sale of business, going public).

((True Or False))

C) The cost approach is easier to apply to real estate, but it is useful when the company has assets with fair values significantly different than net book values, or is underperforming.

(True or False)

D) The cost approach can be applied to real estate by calculating: Replacement cost (the cost to buy new, build) - Physical obsolescence (due to current age, damage) - Functional obsolescence (due to changing tastes) - Economic obsolescence (due to change in demand) = FAIR VALUE

(True or False)

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