Which of the following is the best statement of the Valuation Principle?
A)It is not possible to compare costs and benefits that occur at different points in time,in different currencies,or with different risks.
B)The value of a commodity or an asset to the firm or its investors is determined by its competitive market price.When the value of the benefits exceeds the value of the costs in terms of market prices,the decision will increase the market value of the firm.
C)The rate at which we can exchange money today for money in the future by borrowing or investing is the current market interest rate and is same across all banks.
D)If equivalent goods or securities trade simultaneously in different markets across the world,they will trade for the same price.

Question

Quizplus · Accepted Answer

The Valuation Principle states that the value of a commodity or an asset is determined by the market price, and when the benefits exceed the costs in terms of market prices, the decision will increase the market value of the firm. This principle is fundamental to financial decision-making and investment. A, C, and D are not the best statements of the Valuation Principle.

Which of the Following Is the Best Statement of the Valuation