You recently purchased a grocery store. At the time of the purchase, the store's market value and its book value were equal. The purchase included the building, fixtures, and inventory. Which one of the following is most apt to cause the market value of this store to be less than its book value?
A) A sudden and unexpected increase in inflation
B) The replacement of old inventory items with more desirable products
C) Improvements to the surrounding area by other store owners
D) Construction of a new restricted access highway located between the store and the surrounding residential areas
E) Addition of a stop light at the main entrance to the store's parking lot

Question

Quizplus · Accepted Answer

The construction of a new restricted access highway located between the store and the surrounding residential areas could decrease the foot traffic to the store and make it less accessible, resulting in lower demand and therefore lower market value. The other options either have no impact on the market value or may increase it.

You Recently Purchased a Grocery Store