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Question about Valuation

Subject Economics

Economics

Source Originais Teachy

Originais Teachy

Topic Valuation

Valuation

Difficulty Medium

Medium

(Originais Teachy 2023) - Question Medium of Economics

A local bakery has recently expanded its operations by opening a new branch in the city center. Considering the cost of the new facilities, the potential increase in sales, and the risk of the investment, the bakery must now reevaluate its total business worth. Given that the value of a business is often determined by considering both its tangible and intangible assets, how might the bakery's expansion impact its overall valuation?

The bakery's expansion will not impact its overall valuation as the increase in tangible and intangible assets will be offset by the risk of the investment.

The bakery's expansion can impact its overall valuation by increasing its tangible and intangible assets and potential sales, but the risk of the investment must also be considered.

The bakery's expansion will only impact its overall valuation by increasing its tangible assets, such as the new facilities.

The bakery's expansion will impact its overall valuation only if the new branch leads to an increase in sales.

The bakery's expansion will decrease its overall valuation due to the risk and cost of the investment.

Answer sheet:

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