The valuation method that is commonly used,but tends to oversimplify the valuation process,is called:
A)the excess-earnings method.
B)the balance sheet method.
C)the capitalization method.
D)the market approach.

Question

Quizplus · Accepted Answer

The balance sheet method is commonly used for valuation but tends to oversimplify the process because it focuses primarily on the net asset value of a company, ignoring other factors such as future earnings potential, market conditions, and intangible assets.

The Valuation Method That Is Commonly Used,but Tends to Oversimplify