1.) The transaction approach is difficult to use because:

the terms of the transactions can be easy to assess.

the terms of the transactions can be difficult to assess.

transactions data are typically as reliable as the data available for multiples analysis, especially when they are associated with a private firm.

transactions involving the purchase or sale of an entire business in an industry tend to occur frequently and hence the amount of data is immense.

2.) Which of the following statements about the free cash flow from the firm (FCFF) approach is true?

The costs associated with noninterest-bearing current liabilities, which are included in the firm's cost of sales and other operating expenses, are added in the calculation of FCFF.

The total value of the firm, VF, is computed as the present value of the FCFF, discounted by the firm's weighted average cost of capital,WACC.

We include the cash necessary to pay short-term liabilities that do not have interest charges associated with them, such as accounts payable and accrued expenses.

The present value of these cash flows exceeds the total value of the firm, or its enterprise value.