CVA

CVA practice questions, page 4 of 10, with answer review and explanations.

Question 16

Statutory law - Case law - Administrative rulings - Company documents - Contracts between parties precedent established by prior transactions Legal documents. These are some of the most important sources of guidance as to:

  1. The applicable standard and premises of value for the given situation.
  2. The appraiser’s experience and judgment.
  3. The selection of appropriate premise
  4. The value of the same business enterprise

Question 17

The valuation opinion repot will typically include the following sections EXCEPT:

  1. A valuation opinion letter summarizing the valuation procedures and conclusions
  2. Several sections summarizing the relevant valuation theory, methodology, procedures, analyses, and conclusions
  3. A listing of the data and documents relied upon by the appraiser
  4. legal case documents

Question 18

One of the most important tools for conducting a business valuation thoroughly and on a timely basis is a proper schedule. Most first-time, or in frequent, business valuation clients (and their attorneys) tend to underestimate the amount of lead time necessary for the appraiser to prepare a through and professional opinion. Scheduling problems often arise because:

  1. The client delays in committing to the project hoping that the valuation problem will go away.
  2. A major change in some aspect of assignment midway through the project
  3. The client is not having awareness regarding valuation standards and selection criteria
  4. Of some external pressures on the client

Question 19

____________ is perhaps the most difficult task for the business appraiser.

  1. Getting two or more parties with different economic and business expectations to agree on projected future benefits and the risks associated with achieving those projections.
  2. Identification of partial interest.
  3. Selection of enterprise value premise.
  4. Estimation of invested capital

Question 20

When preparing a business valuation for reorganization proceedings under bankruptcy statues, the parties will frequently rely on___________.

  1. Reengineering of valuation procedures
  2. Capitalization of anticipated cash flow
  3. Ownership of assets
  4. Enterprise value