Question

net asset value is method is based on the assumption that the company is ______.
1)a going concern
2)going to be liquidated
3) (a) and (b)
4)none of the above ​

Answer 1

QUESTION :-

net asset value is method is based on the assumption that the company is ______.

1)a going concern

2)going to be liquidated

3) (a) and (b)

4)none of the above

ANSWER :-

Option -3 - A and B

Answer 2

The net asset value is based on the assumption that the company is 2) going to be liquidated.

• Net asset value is also called asset backing value or the liquidation value.
• Under this method, the financial value of the shares is dependent on the net assets available to equity shareholders.
• When deciding net asset value, fictitious assets should not be considered.
• In the Net Assets method, all liabilities are not considered.
• Net Asset Value is the ratio of the difference between the fund assets and the fund liabilities to the total number of outstanding shares.
• $Net Asset Value = \frac{Fund Assets - Fund Liabilities}{Number of outstanding shares}$