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Which of the following is the most important criteria in evaluating the quality of long-term investments...

Which of the following is the most important criteria in evaluating the quality of long-term investments and intangible assets?

A)The amount of future investment required

B)The amount of amortization expense

C)The valuation of fixed assets

D) The ease with which they could be converted to cash

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Answer #1

The most important criteria in evaluating the quality of long-term investments and intangible assets :

Answer : A) The amount of future investment required.

How much funds would be required would depend on the amount of future investment required. On the basis of this, it is decided by the management how much to be financed by equity, and how much by debt. This would be necessary to work out the weighted average cost of capital, which would be the hurdle rate for the investment project.

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