Which method of business valuation relies on three forecasts of future earnings-optimistic,pessimistic,and most likely?
A)Balance sheet technique
B)Excess-earnings method
C)Discounted future earnings
D)Market approach

Question

Quizplus · Accepted Answer

Discounted future earnings method relies on three forecasts of future earnings - optimistic, pessimistic and most likely, and calculates the present value of those earnings based on a discount rate. The other methods mentioned do not rely on these three forecasts.

Which Method of Business Valuation Relies on Three Forecasts of Future