CVA Valuation Approaches and Methodologies Flashcards
6 cards from real Certified Valuation Analyst practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CVA Valuation Approaches and Methodologies flashcards as text
Which of the following is a key characteristic of the Income Approach in business valuation?
Answer: Calculates present value of expected cash flows
The Income Approach determines value based on the present value of future economic benefits, such as cash flows or earnings.
What is the Market Approach in valuation primarily based on?
Answer: Market comparables
The Market Approach compares the subject company to similar businesses that have been sold or publicly traded.
Which method under the Asset-Based Approach adjusts individual assets and liabilities to fair market value?
Answer: Adjusted net asset method
The Adjusted Net Asset Method revalues each asset and liability to its current market value to determine equity value.
Which valuation approach is most suitable for asset-heavy companies like manufacturers?
Answer: Asset-Based Approach
The Asset-Based Approach is often used for companies with significant tangible assets, such as manufacturers and real estate firms.
Which technique is commonly used under the Income Approach?
Answer: Discounted Cash Flow (DCF)
Discounted Cash Flow (DCF) analysis calculates the present value of future cash flows, a standard method in the Income Approach.
What is the primary limitation of the Market Approach?
Answer: Dependence on comparable market data
The Market Approach can be limited by the availability of truly comparable companies or transactions, especially for unique businesses.
How this page was made: written with AI tools and published by Nathan Beja, founder of Practice Test Geeks, who is responsible for its content. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy
Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- nacva.com — Score validity, eligibility, time limit, passing score, test delivery, exam format, late registration, retake fee, retake policy, score release · verified Nov 2026