The ________ approach to valuing a business assumes that a dollar earned in the future is worth less than that same dollar is today.
A)balance sheet
B)capitalized earnings
C)excess earnings
D)discounted future earnings

Question

Quizplus · Accepted Answer

The discounted future earnings approach to valuing a business takes into account the time value of money, which means that a dollar earned in the future is worth less than that same dollar today. This approach considers projections of future earnings and discounts them to their present value to determine the current worth of the business.

The ________ Approach to Valuing a Business Assumes That a Dollar