Download Certified Valuation Analyst.CVA.TestKing.2017-06-16.130q.vcex

Vendor: Financial
Exam Code: CVA
Exam Name: Certified Valuation Analyst
Date: Jun 16, 2017
File Size: 259 KB
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Demo Questions

Question 1
One of the most important tools for conducting a business valuation thoroughly and on a timely basis is a proper schedule. Most first-time, or in frequent, business valuation clients (and their attorneys) tend to underestimate the amount of lead time necessary for the appraiser to prepare a through and professional opinion. Scheduling problems often arise because:
  1. The client delays in committing to the project hoping that the valuation problem will go away.
  2. A major change in some aspect of assignment midway through the project
  3. The client is not having awareness regarding valuation standards and selection criteria
  4. Of some external pressures on the client
Correct answer: AB
Question 2
____________ is perhaps the most difficult task for the business appraiser. 
  1. Getting two or more parties with different economic and business expectations to agree on projected future benefits and the risks associated with achieving those projections.
  2. Identification of partial interest.
  3. Selection of enterprise value premise.
  4. Estimation of invested capital
Correct answer: A
Explanation:
Question 3
When preparing a business valuation for reorganization proceedings under bankruptcy statues, the parties will frequently rely on___________.
  1. Reengineering of valuation procedures
  2. Capitalization of anticipated cash flow
  3. Ownership of assets
  4. Enterprise value
Correct answer: B
Question 4
Which of the following are categories in which projections are usually necessary?
  1. Antitrust, lost business opportunity, breach of contract
  2. Infringement of patents, copyrights or trademarks
  3. Goodwill
  4. Diversified businesses
Correct answer: AB
Question 5
“When earnings have once been “realized”, so that they can be expressed with some approach to accuracy in the company’s accounts, they are already water under the mill and have no direct bearing on what the property in question is now worth. Value, under any plausible theory of capitalized earning power is necessarily forward looking. It is an expression of the advantage that an owner of the property may expect to secure from the ownership in the future. The past earnings are therefore beside the point, save as a possible index of future earnings”. This statement correctly expresses:
  1. Realized earnings
  2. Enterprise value 
  3. Realized earning verses prospective earnings
  4. Prophesied gross and net earnings
Correct answer: C
Question 6
One way or the other, the financial benefits of ownership of an interest in a business enterprise must come from the following sources EXCEPT:
  1. Dividends, distributions, or other type of cash flow 
    a) From operations, or 
    b) From investments (e.g. interest)
  2. Liquidation or hypothecation of assets
  3. Loan/Debt
  4. Sale of interest
Correct answer: C
Question 7
In many instances, value considerations are tempered by internal variables, often variables relative to specific shareholding as opposed to the company as a whole. 
Which of the following is NOT out of such variables?
  1. Size of the subject interest (reflecting not only magnitude but control issues)
  2. The right to vote and to impact the direction of the business
  3. Restrictive provisions affecting ownership rights
  4. Legal proceedings related to ownership or management prerequisites.
Correct answer: D
Explanation:
Question 8
1. Dividends or partnership withdrawals (i.e. current economic income). 2. Proceeds from the ultimate sale of the ownership interest or liquidation of the subject business (i.e., including any long-term appreciation in the value of the security interest itself). These two are the categories of:
  1. The economic benefits that the non-controlling ownership interest holder may realize.
  2. The financial benefits that the non-controlling ownership interest holder may realize.
  3. The economic benefits that the controlling ownership interest holder may realize.
  4. The financial benefits that the controlling stakeholder may realize.
Correct answer: A
Question 9
Accepted business valuation approaches and methods are all of the following EXCEPT:
  1. Income approach
  2. Asset-based approach
  3. Guideline acquisition company approach
  4. Market-based approach
Correct answer: C
Explanation:
Question 10
There’s a tendency for the market for the businesses to change more rapidly than the market for real estate. After all, a business can be thought of as a collection of _____________ each with its own price volatility and risks of ownership.
  1. Realized and unrealized earnings
  2. Short and long-term liabilities
  3. Tangible and intangible assets
  4. Unearned Revenues and fixed assets
Correct answer: C
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