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What Is a Disadvantage Associated with Replacement Cost Method of Business

Question 12

Multiple Choice

What is a disadvantage associated with replacement cost method of business valuation?


A) It does not realistically reflect the market value of the assets.
B) It does not account for intangible assets such as brand equity.
C) It does not impose an upper limit on the value of the business.
D) It does not always provide accurate costs for older assets.
E) It does not allow for a comparison between similar businesses.

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