Which of the following is the best statement of the Valuation Principle?
◦ The value of a commodity or an asset to the firm or its investors is determined by its competitive market price. When the value of the benefits exceeds the value of the costs in terms of market prices, the decision will increase the market value of the firm.
◦ If equivalent goods or securities trade simultaneously in different markets across the world, they will trade for the same price.
◦ It is not possible to compare costs and benefits that occur at different points in time, in different currencies, or with different risks.
◦ The rate at which we can exchange money today for money in the future by borrowing or investing is the current market interest rate and is same across all banks.
The Cephalocaudal Principle
Principle of Recuperation
Example of Reconciling a Bank Statement Cont.
Gestalt Principle: Continuity
Gestalt Principle: Similarity
Physics - Archimedes Principle