Question

The owner of a small manufacturing plant recently sold the plant for $1,900,000. This amount includes the real estate, the equipment, the name of the company, and the client list. This $1,900,000 amount would be considered thea) Assessed valueb) Insurable valuec) Value in used) Value of the going concern

Answer 1

d) Value of the going concern

The owner sold the manufacturing business along with the name and client list, therefore it will continue his operation with the new owner. The value of the business if called going concern.

This 1,900,000 represent the real state plus the business.

Step-by-step explanation:

a) Assessed value

These is the value of a property to determinate the taxes

b) Insurable value

The cost of total replacement of the building and imporvement of a property.

c) Value in use

This would be the present value of the cash flow of the business.

d) Value of the going concern

The owner sold the manufacturing business along with the name and client list, therefore it will continue his operation with the new owner. The value of the business if called going concern.

This 1,900,000 represent the real state plus the business.