The value of an asset depends upon ?
Correct answer: C. the present value of the future stream of income it can earn
- A. its scrap values
- B. its depreciation
- C. the present value of the future stream of income it can earn
- D. the cost of loans
Explanation
An asset is valued by discounting the income it is expected to generate in the future back to its present value. Scrap value and depreciation may affect that calculation, but they are not the fundamental valuation rule.
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