Question

When determining the value of a firm, which of the following statements is true? A financial asset is considered to have value only if it is acquired at its market value. A financial asset is considered to have value only if it has the ability to generate positive cash flows. A financial asset is considered to have value only if it is acquired at its book price.

Answer 1

Answer:

A financial asset is considered to have value only if it is acquired at its market value

Explanation:

A financial asset is an asset which is not physical in nature and is considered as a liquid asset. The value of financial asset is determined by contractual rights or agreement. The financial asset is considered to have value when it is able to generate positive cash flows in future and is acquired at market value. This means financial asset will return money to the company in near future.