nacva cva practice test

In ________cases, the valuation date itself is an issue to be resolved by the court. In such situations,
the appraiser must be prepared to address the valuation as of several dates, sometimes without
knowing which date the court determined to be relevant until after the judgment is rendered. Since
the choice of valuation date in such cases is a legal matter.

• A. Litigated cases
• B. Estate tax cases
• C. Enterprise value identification cases
• D. Cooperatives

Valuation reports should contain a set of limiting conditions, and one of the typical limiting
conditions is as follows:

• A. Legal and estate tax factors
• B. The valuation is valid only for the valuation date or dates specified herein. No other purpose is intended or should be inferred
• C. Litigation over business valuation is commonplace
• D. The purpose of the valuation encompasses the use to which the valuation exercise is expected to be put

“The amount at which property would change hands between a willing seller and a willing buyer,
when neither is acting under compulsion and when both have reasonable knowledge of the relevant
facts”. This definition is related to:

• A. Investment value
• B. Fair market value
• C. Litigation value
• D. Standard of value

“Market value is the most probable price which a property should bring in a completive and open
market under all conditions requisite to fair sale the buyer and seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus.” Implicit in this definition
is the consummation of a sale as of a specified date and the passing of title from seller to buyer
under conditions/s whereby:

• A. Buyer and seller are typically motivated
• B. Both parties are well informed or well advised and acting in what they consider their best interests
• C. A reasonable time is allowed for exposure in the open market
• D. Differences in financing costs and tax status

Virtually, all businesses or interests in businesses may be appraised under some alternatives
premises of value. Which of the following is not out of those premises?

• A. Value as a going concern
• B. Value as an assemblage of assets
• C. Value as an orderly disposition
• D. Value as a sudden liquidation

Statutory law
Case law
Administrative rulings
Company documents
Contracts between parties precedent established by prior transactions Legal documents. These are
some of the most important sources of guidance as to:

• A. The applicable standard and premises of value for the given situation.
• B. The appraiser’s experience and judgment.
• C. The selection of appropriate premise
• D. The value of the same business enterprise

The valuation opinion repot will typically include the following sections EXCEPT:

• A. A valuation opinion letter summarizing the valuation procedures and conclusions
• B. Several sections summarizing the relevant valuation theory, methodology, procedures, analyses, and conclusions
• C. A listing of the data and documents relied upon by the appraiser
• D. legal case documents

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:

• A. The client delays in committing to the project hoping that the valuation problem will go away.
• B. A major change in some aspect of assignment midway through the project
• C. The client is not having awareness regarding valuation standards and selection criteria
• D. Of some external pressures on the client

____________ is perhaps the most difficult task for the business appraiser.

• A. 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.
• B. Identification of partial interest.
• C. Selection of enterprise value premise.
• D. Estimation of invested capital

When preparing a business valuation for reorganization proceedings under bankruptcy statues, the
parties will frequently rely on___________.

• A. Reengineering of valuation procedures
• B. Capitalization of anticipated cash flow
• C. Ownership of assets
• D. Enterprise value