The ________ method of valuation assumes that a dollar earned in the future will be worth less than that same dollar today.

Question

Quizplus · Accepted Answer

The statement in the question describes the concept of time value of money, and the discounted future earnings approach is the method that incorporates this concept into valuation. The market approach compares the subject with similar assets or companies in the market, while the asset approach values the entity based on the present value of its assets less liabilities. Neither of these methods explicitly considers the time value of money. Therefore, the correct answer is B.

The ________ Method of Valuation Assumes That a Dollar Earned