1. Each of the following is a situation that may drive a business valuation engagement except:
a. An estate or gift tax matter
b. Divorce, economic damages, or other litigation
c. A financial statement fraud
d. Acquisitions and buy- sell transactions

2. Publicly traded companies are valued in the market-place through:
a. Competitive bidding
b. Analyst recommendations
c. Strategic efforts
d. All of the above

3. Determining a value for a private company is easier than determining a value for a public company.
a. True
b. False

4. The Revenue Ruling that remains the single most important piece of business valuation literature is:
a. 54– 1040
b. 69– 1120
c. 92– 32
d. 59– 60

5. In theory, the value of a business is the total of its ­estimated future cash flows.
a. True
b. False

6. In a positive interest rate environment, the concept that a dollar today is more valuable than a dollar in the future is known as:
a. Value added
b. Time value of money
c. Risk- reward theory
d. The efficient markets hypothesis

11- 47. In computing present value, the two primary components are:
7 expected stream of future benefits and ­today’s asset value
b. Residual asset value and the appropriate ­discount rate
c. The expected stream of future benefits and the ­appropriate discount rate
d. The market value of assets and the book value of liabilities

8. Forensic accountants usually agree on the facts and assumptions used to develop the expected stream of future benefits.
a. True
b. False

9. A projection and a forecast are different terms for the same set of cash flow assumptions.
a. True
b. False

10. Each of the following is a reason prospective data are seldom used to value a closely held business except:
a. Such data are seldom developed by closely held companies.
b. Prospective data cannot be developed in a form that can be discounted to a present value.
c. Prospective data are subjective, which invites ­rebuttal arguments of speculation and bias.
d. All of the above are reasons.