Which one of the following is an example of the expected benefit approach for valuing long-lived assets?
A) Current cost.
B) Historical cost.
C) Discounted present value.
D) Current replacement value.

Question

Which one of the following is an example of the expected benefit approach for valuing long-lived assets? 
A) Current cost.
B) Historical cost.
C) Discounted present value.
D) Current replacement value.

Quizplus · Accepted Answer

The expected benefit approach values long-lived assets by estimating their future expected cash inflows and outflows and discounting those cash flows to their present value. Therefore, discounted present value is an example of the expected benefit approach. Current cost, historical cost, and current replacement value are all alternative valuation methods for long-lived assets.

Which One of the Following Is an Example of the Expected