Question 11.C-R-Q.2: Why is MVA not really suitable as a tool for internal manage...
Why is MVA not really suitable as a tool for internal management purposes?
The blue check mark means that this solution has been answered and checked by an expert. This guarantees that the final answer is accurate.
Learn more on how we answer questions.
Learn more on how we answer questions.
Two problems with the use of MVA as a tool for internal management purposes were identified in the chapter. First, MVA depends on establishing a market price for shares and so only businesses listed on the Stock Exchange can use this technique. Second, MVA cannot be used to evaluate
Related Answered Questions
Question: 11.A-S-Q.1
Verified Answer:
Romeo plc
Adjusted net assets (capital invested)
[...
Question: 11.A.4
Verified Answer:
A business will normally be financed by a combinat...
Question: 11.A.2
Verified Answer:
Managers may engage in ‘creative accounting’. They...
Question: 11.A.3
Verified Answer:
It can be argued that the business is simply a por...
Question: 11.A.1
Verified Answer:
Managers normally use accounting profit or some ra...
Question: 11.E.6
Verified Answer:
Adjusted NOPAT
\begin{matrix}&£m&£m...
Question: 11.E.4
Verified Answer:
There is no single correct answer to this problem....
Question: 11.E.2
Verified Answer:
There are a number of ways in which the accuracy o...
Question: 11.C-R-Q.4
Verified Answer:
If businesses are overcapitalised it is probably b...
Question: 11.C-R-Q.3
Verified Answer:
The problem with taking changes in the market valu...