Final answer:
The goal of financial valuation is to assign to an asset a specific dollar value that encompasses tangible and intangible costs. It helps decision makers understand the potential value and return on investment of an asset.
Step-by-step explanation:
The goal of financial valuation is to assign to an asset a specific dollar value that encompasses tangible costs as well as intangible ones. Financial valuation is the process of determining the economic value of an asset or investment based on its expected future earnings or cash flows.
Financial valuation takes into account both tangible costs, such as the initial cost of purchasing the asset, and intangible costs, such as the potential risk and opportunity cost associated with the asset. It helps decision makers understand the potential value and return on investment of an asset.
For example, when valuing a company, financial valuation would take into consideration not only the physical assets like buildings and equipment but also intangible assets like brand value, customer relationships, and intellectual property.